PPI has many names. Sometimes it is called lifestyle protection or accident protection plan. It is also known as sickness protection or unemployment cover. PPI stands for payment protection insurance and this is supposed to be a safety net for all kinds of borrowers who have personal loans, mortgages, credit cards or store cards etc. This insurance, though useful, is expensive and when the scandal of PPI surfaced in UK, there was a disclosure that the amount involved in the scandal would run into billions of pounds.
With the relevant actions taken by the FSA and sanctioned by the High Court, the campaign for the refund of mis-sold PPI became one of the biggest campaigns in the history of finance in the UK.
Enlightenment on the PPI mis-selling
There were many factors that contributed to the awareness of the mis-selling of the PPI or payment protection insurance. Firstly, Which? Magazine brought light to the matter. This was followed-up by other newspapers. Then the scandal was supported by Financial Services Authority; and eventually appropriate actions were taken by other bodies like the Financial Ombudsman, British Banking Association and High Court.
The initial imposition of penalty to small lenders was followed by penalties on bigger lending institutions. It became clear that a great number of PPI policies were mis-sold in the past and actions were needed to curb this practice of financial institutions.
Reason for the huge number of cases of PPI mis-selling
There was a big number of mis-sold PPI due to the following reasons:
- There were a lot of borrowers who just conceded to the payment of PPI due to the need for the loan approval.
- The borrowers were not given any options by the banks and the lending institutions. They were never told about that PPI is optional.
- Many borrowers were deliberately uninformed so there were no contradictions on the part of the uninformed clients or borrowers.
- Banks and other lending companies continued to impose the PPI payments on the customers and were happily making additional income without any benefits to the customers.
All in all, you can conclude that the number of cases of mis-selling of PPI policies increased due to the ignorance of landing institutions and mis-information to the borrowers; this scenario was exploited by the lenders who wanted to make more profits in the loan transactions. If you feel you have been mis-sold PPI a claim company like http://ppinopaperwork.co.uk may be able to help you make a claim, without needing any original paperwork.