Millions of consumers in the UK have been falsely sold expensive insurance policies known as PPI, often costing them thousands. Having PPI added on to credit cards is extremely common and most of it was mis-sold to credit-card holders in the UK. Banks and lenders put a lot of pressure on clients to purchase the product; sometimes telling them it was essential for the loan to be accepted, or selling policies to people who would not be eligible to benefit from them. PPI policies were even added on to customers’ accounts without them knowing, meaning customers were unaware that they were paying for PPI.
Even if you have never heard of PPI, you still might have been sold this policy under different names like payment plan, payment guard etc.
So, what exactly is PPI on credit cards? Find out below.
PPI on Credit Cards
Payment protection insurance (PPI) is an insurance product which was designed to cover the monthly repayments if the borrower becomes ill, disabled, unemployed, or faces other circumstances that may prevent them from being able to pay off the debt. PPI was widely sold by banks and other credit providers as an add-on to their credit cards.
What Types of Credit Cards May Have PPI Added?
Over 100,000 people have been mis-sold policies by big lenders like Barclaycard, Barclays, HSBC, MBNA, NatWest, RBS, Santander, Lloyds and others.
If you have taken out a credit card or store card in the last few years, Payment Protection Insurance (PPI) may be included as part of the agreement. Check the agreements and statements to see if it includes PPI. For a credit card, PPI charges are added to your account each month, so this could be reflected in your statements.
How to Find Out If You Were Mis-Sold PPI on a Credit Card?
Below are a few ways to find out whether or not you have been mis-sold PPI on your credit cards:
- Check if your credit agreement includes terms such as Insurance, PPI, ASU, or a combination or similar terms.
- Check your monthly balances to see if you get charged for insurance, such as a single premium, or a certain % every month, depending upon your balance.
- If you no longer have any paperwork for your accounts, you can conduct your own Subject Access Request (SAR), which will allow you to request any details a financial organisation has on you within the last 6 years.
- The easiest way to check if you have ever paid for a PPI policy if to take advantage of our “Free PPI check” tool, which in conjunction with financial institutions have agreed with CMCs to pre-submit client details to find out if they have PPI. Financial companies which are not part of this process can be dealt with under the SAR procedure.
Why was PPI Problematic?
PPI on a credit card is a complicated policy sold in an overly simplistic way. The exclusions and terms are quite similar to other types of insurances but the premiums are calculated based on the outstanding balance each month. Unlike any other type of insurance, the underwriting (checking whether you are covered or not) is not done until and unless you make a claim. This means that you can take out a PPI policy on a credit card, pay the premiums for many years but when you try to make a claim you could be told you are not covered and cannot receive the benefits.
Most credit card companies sell PPI policies without giving you any advice on whether or not you will be eligible to benefit from the product. This again is unlike most other types of voluntary insurances. If you buy a life insurance policy the sales person will ask necessary questions about your health and medical history to ensure you can claim for it upon requirement. The underwriting is also done before you agree to buy the policy. This is not the case with PPI and it does not make sense to get a policy when you don’t even know whether you are eligible to be covered by it or not.
There are also chances that if an outstanding balance remains at around the same level continuously, you will end up paying more in premiums than you can receive in benefits within approximately 7 years. This tenure is reduced even further if you transfer a larger balance onto your account immediately as you will start paying higher monthly premiums immediately via a PPI charge. Not to forget that even if you do make a claim to be covered, you still have to pay the premiums each month on your credit card.
What to Do If You Have a Mis-Sold PPI policy on Your Credit Card
If you think you have been mis-sold PPI on your credit card within the last ten years (or longer in certain cases), we at iSmart Consumer Solutions can help you claim back your mis-sold PPI. If you are still a little unsure about whether to claim or not then just get in contact with one of our team members now to discuss your situation and the options available to you. We will make sure that you have been mis-sold PPI before we start any claim against your credit card provider, which is part of a free check service that we offer. After we find out if you have any PPI or not, you are free to choose whether or not to continue with a claim.
If we deal with your complaint we will make a claim for the refund of 100% of the PPI premiums that you have paid. In our experience, many credit card companies will initially make offers that are inaccurate and do not represent a correct refund. If you want to get a fair refund you need to know the facts and unfortunately, your credit card company is unlikely to give you the complete facts or a fair refund. So, make sure your complaint is in the right hands and you can rest assured with us as we have much experience and a wealth of expertise in dealing with PPI claims, we have already processed 169,229 successful claims and claiming back over £274m for our customers.
If you have had any kind of credit card or store card in the last few years, you may have been mis-sold PPI, and it is highly advisable that you should find out if you could make a claim as soon as possible. Call us today 08000 439 243 or use our free check to start the process; we can find out if your policy was mis-sold to you and will ensure that you get back what is rightfully yours.