Mark founded MoneyMaxim in 2008, with the aim of delivering an impartial and independent service. Mark is a regular money saving expert in the press and writes regular news and articles for the MoneyMaxim news pages sharing his views on banking, personal insurance and the utilities (gas, electricity, mobile and home phones, broadband and pay TV) market with customers.
Payment Protection Insurance has been a huge benefit to many thousands of borrowers over the years, giving them peace of mind about their finances in case their situation changes. PPI can be an important insurance policy to protect people if they are unable to stay on top of their situation in circumstances such as being made redundant or being unable to work because of illness.
Recently, PPI claims have somewhat overshadowed the positives of PPI by highlighting the risk of financial mis-selling. Although not a huge problem in the grand scheme of things, news coverage has done little to show that Payment Protection Insurance can be a valuable option for borrowers.
So how do you know if you needed and were rightly advised to take out PPI, or if your policy was mis-sold?
As with all insurance policies, PPI is only valid under certain circumstances. Many problems have arisen because people such as those who are self-employed were told the policy covered their situation, but when they needed to claim they found out that was not the case.
For the most part, banks and financial advisers who sell PPI do so honestly and professionally, and it is only in a limited number of cases that PPI was mis-sold. This usually means the policy was added on to the loan, credit card or mortgage without the borrower knowing, or that they were wrongly advised that PPI was a good option for them.
Payment Protection Insurance claims could be made in these sorts of situations, but the outcome and any compensation given will depend on the circumstances.
As with any claim, details will be needed and this means paperwork for the finance agreement and information on the PPI policy, as well as your account of what happened when you took out the loan, credit card or mortgage.
The average payout is £2,500, but the level will depend on how much you have paid out for the PPI cover. Interest on this amount can also be awarded, but this is taxable.
If you want to find out more about a PPI policy on your borrowings and whether you could claim some, or all, of the money back, it is wise to start by gathering together the information detailed above.
Then, ring the bank or lender or financial adviser to start the process. If you encounter any difficulties you can contact the Financial Ombudsman Service.
The Citizens Advice Bureau has also produced a guide to PPI claims, which can be accessed here, offering support and guidance on the process which is involved with these complaints.
You might decide to use a solicitor or claims management service so you do not have to deal with all the paperwork involved.
‘Whatever route you take, make sure you have all the necessary information to hand and do not be afraid to stand up for your right to seek compensation if you have been the victim of financial mis-selling,' advises Matthew Briggs, CEO of www.claims.com.