Reclaiming Credit Card PPI Premiums Now Faster13th June 2011
Payment protection insurance, or PPI, is a type of insurance cover that's marketed along with financial products such as loans, credit cards, and mortgages. Its purpose is to cover repayments should the policyholder be unable to work and keep up with the monthly repayments due to illness, accident, or redundancy. Though the principle behind it seems rational, it has been under heavy criticism for the past couple of years for being costly and being wrongly sold often.
The door is now wide open for consumers who were inappropriately sold PPI before to start claiming their compensation. Just in April of this year, the High Court upheld the Financial Services Authority's (FSA) instruction for all UK banks to review all past sales and contact customers who possibly were miss-sold PPI. They have to ask all policyholders if they feel that they've been wrongly sold PPI and to inform them that reclaiming premiums is possible.
Initially, the British Bankers' Association (BBA) disputed the ruling and said that the FSA's instruction is compelling them to apply new standards to previous sales that were closed before these new standards were established. But just this May, the BBA and UK banks have decided to no longer appeal the decision of the High Court.
So what does this mean for consumers who bought PPI cover for their financial obligations, particularly for credit cards? For those who were misled into buying the said insurance cover, their requests for payouts can now be heard! And for those who don't even know that PPI is part of their monthly credit card statement, they will get the chance to be aware of their situation once they're contacted by the banks.
Who are eligible to reclaim PPI premiums?
Just because an opportunity was opened for everyone to start reclaiming, it doesn't automatically mean that you'll be getting something back when you file a complaint. In fact, you first need to determine whether you have PPI. Have you been sold the insurance without you realizing it? When PPI is attached to a credit card, your monthly statements should clearly indicate the payments that were taken for PPI.
The most common case is when a customer was pushed to take out PPI even if he/she wasn't qualified to claim on it in the first place. You have the right to reclaim if:
- Your status makes it impossible for you to reclaim in the future. Here are the eligibility considerations to bear in mind:
- Age. PPI policies usually have an age cap. When you're more than 65 or 70 years of age - depending on the policy - when you took out PPI, then you're entitled to a reimbursement.
- Employment status. If you're unemployed, retired, a part-time worker, or a student at the time when PPI was sold to you, then you're eligible for a refund.
- Pre-diagnosed medical condition. If you had an existing health condition yet the agent failed to mention that PPI isn't suitable for you, you can claim.
Not everyone was actually wrongly sold payment protection insurance. In fact, PPI turned out to be appropriate and helpful for a lot of consumers who couldn't make repayments due to an unforeseen event. However, if you feel that you need to be reimbursed for the premiums that you paid, then you should complain to the credit card company immediately. If there's no response after around two months or if you're dissatisfied with the answer that you got, you can forward your complaint to the Financial Ombudsman Service.
If it was indeed proven that you were inappropriately sold payment protection insurance, you should be entitled to get a refund of all the premiums that you paid in the past, plus interest.