PPI Frequent Q & A's
Q. When I took out my loan I was told I had to take out PPI, is this true?
A. Payment Protection Insurance is in most instances optional, even though it is generally sold as part of a loan or finance agreement. PPI is extremely profitable to companies and large incentives are offered to staff to 'sell' these policies. If you have any doubts as to whether your PPI is optional we are happy to take a look for you.
Very occasionally, particularly where the loan amount is large, the company may insist on some form of protection to cover payments should you be unable to work. However, this does not mean you cannot find your own Payment Protection Insurance – you don't have to use the same company and you may well get it cheaper elsewhere.
Although companies that do make it compulsory to take out their PPI are not technically breaching any particular rules, they may be contravening of the Financial Service Authority (FSA) in 'treating customers fairly' or the 'acting in a fair and reasonable manner'. The UK banking code states that banks should not make customers take out their policies.
Q. If I am retired, a contractor, unemployed or self-employed should I still have PPI?
A. In the case of being retired or unemployed or only work 16 hours per week the answer is NO. PPI is designed to replace income in the event you cannot earn it. If you do not have income any claim on the policy would be rejected.
If you are self employed or contracted it becomes more complex. Some policies provide some element of cover but with restrictions. Often it will only cover not being able to work due to illness, injury or critical illness as opposed to lack of work opportunity. This information should be acquired by the sales person before suggesting a policy.
Q. On my credit cards, loan and store cards statements I have a monthly PPI charge added. I don't recall asking for or agreeing to this?
A. Quite often, when you apply for a loan, finance or other credit facility the option to take out PPI is just a tick box. The common question asked by the salesperson is 'do you want to protect your repayments in the event you are unable to work'. If you answer 'yes' the box will be ticked and they move on. The salesperson should actually explain what PPI is, what it covers, what it will cost and if your circumstances mean you are eligible for cover. This is not always the case.
Another familiar method some companies use is to automatically include PPI within the agreement. In this instance it is left to the client to read the small print and opt out. This normally falls outside the Financial Service Authority (FSA) 'treating customers fairly' or the 'acting in a fair and reasonable manner' regulations.
Q. I don't want my PPI anymore but my lender says I have already paid for it PPI as part of the loan and won't give me a refund?
A. Single premium PPI or front loaded PPI (where you pay the whole amount of the PPI at the beginning of the agreement), is a possible issue for mis-selling in itself if the seller did not advised you that cheaper 'monthly paid' are available.
With regard to refunds many companies will either not refund any of the premium or will not refund a proportionate amount (if you cancel the PPI or repay the loan early). Regulations state that refunds should be at least pro-rata and anything else is unacceptable. Nevertheless, if it can be proved that the policy was mis-sold, you may obtain a full refund.
Q. I can't work as I am suffering from stress. My PPI insurer has rejected my claim.
A. There are many conditions where a PPI policy would reject a claim; stress; back problems, chronic illnesses, depression and a whole lot more are often exemptions under which the policies which mean they won't pay out. Also if you had a pre-existing condition when you took out the policy you are not covered in relation to that condition. The advisor should, under FSA guidelines, fully explain the 'key benefits and exclusions' of the policy. This should include anything which would stop you being able to make a claim.
Q. Do I have to use conkersclaims™ to make my claim or can I do it myself?
A. If you do not wish to appoint an agency, such as conkersclaims™, to process your claim it is possible to initiate a claim yourself. This is like not appointing a solicitor when you buy a house and doing the conveyance and leg work yourself.
If you decide to undertake the work on yourself without the help of conkersclaims™ make sure you keep the insurer under pressure. If your claim is rejected you will need to take your claim to the FOS or FSCS.
You can expect your claim to take between a minimum of three months if everything runs smoothly but maybe up to a year if your claim is rejected. However we have very good relationships with the banks and loan providers, and we may well reduce this time considerably.