Thousands of people have been mis-sold Payment Protection Insurance policies due to failings in bank sales procedures and some of them will not even be aware they have the cover.
Payment Protection Insurance (PPI) is an insurance policy designed to cover repayments on loans, credit cards and mortgages if the customer is unable to make those payments. It is often sold at the same time the loan, mortgage or credit card is taken out. PPI provides cover if you are unable to work due to an accident, sickness or if you are made redundant.
PPI can be a useful product for many customers and it is not the product itself that has given rise to complaints, it is the way it was sold to customers. Due to the high profitability of the product there was a lot of pressure on staff to sell and this lead to some questionable sales practices. If you have taken out PPI, there is a chance that it may have been mis-sold to you and you may be entitled to claim compensation.
During 6 months of last year Tesco recorded nearly 10,000 new complaints about mis-sold PPI insurance. The Financial Ombudsman service received 30,301 complaints between October and December last year. The number of complaints is rising and the PPI scandal is showing no sign of going away.
As a result of the significant rise in claims, last year Tesco increased their provision to cover claims to £92 million which is an indication of the scale of the problem.
Following the court case in April 2011, the Financial Services Authority (FSA) implemented guidelines on PPI complaints must be investigated and dealt with.
How do you know if your PPI policy was mis-sold?
If you were misled at all when you were sold PPI then you may have been a victim of the mis-selling of this product.
Tesco may have mis-sold you PPI if:
- The terms and conditions of the PPI policy were not explained to you
- You were told you had to take out the PPI policy as part of the loan/credit card
- You were told that having PPI would give you a better interest rate
- You were not asked about your personal circumstances when you took out the policy (e.g. medical conditions, employment status)
- You did tell them about your circumstances but you were still sold the policy anyway even though it did not meet your needs
- You were not asked about any existing cover you had in place
- You were unaware that you had even taken out PPI cover
If you bought your loan or credit card from Tesco online, reclaiming your PPI may be more difficult as the full terms and conditions are usually available on the website and you are asked to confirm you have read them before proceeding. However, if you purchased a loan or credit card before July 2007, there may have been pre-ticked boxes on your application and you may have had to opt out of the insurance rather than opt in. This practice has been stopped but you should check your documentation to see if you have PPI without realising it.
Some banks who have discovered systematic failings in their own sales processes have been contacting customers directly. This does not mean that Tesco will necessarily contact you and you should still contact Tesco if you have not heard from them.
To find out how to make a claim for your mis-sold PPI all you have to do is follow our step-by step guide. It is not necessary to use a claims management company (CMC) to do this for you. The CMC will usually take a fee up front and then a percentage of any compensation you are awarded which can be up to 30%. It is simple and free to make the claim yourself and save on these costs. All the information you need to claim back the money you are owed is available on this site to help get you started.