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  Thursday, Nov 5, 2009 2:37AM / Standard Entry / Members only
  

  Lenders can no longer offer PPI at the same time as loans. People who want to take out Payment Protection Insurance can instead elect to have a standalone policy that is a regular monthly premium. This is because a large number of policies were mis-sold over the last decade. The vast majority of PPI complaints passed on to the Financial Ombudsman Service are awarded in the consumer's favour. This goes to show that payment protection insurance has been incorrectly sold over a number of years and provides consumers with hope that they will eventually receive compensation. Customer complaints about PPI have been rising sharply. The FOS has alread informed us that it is dealing with a record number of PPI complaints.

  So for what reasons are people complaining about payment protectoin and what is the issue with this type of insurance?

  One of the most common reasons for complaint about payment protection is that consumers have felt obliged to take it out. That is to say, the lender would indicate in some way that the loan application would only be successful if the insurance policy was taken out. Some customers have said that lenders went a step further by coercing them to take out PPI.

  It is not in the interests of each and every person to take out PPI insurance. Those with a pre-existing medical condition, for example, may not be able to claim on the policy if the condition reoccurs and they are unable to work. Other medical conditions are also not covered, for example back related problems and stress. PPI insurance can also be unsuitable if the person is retired. This is due to the fact that it is not easy to make a successfull claim if you could not prove your income and could not prove that you had a full time job.

  When PPI is added to a loan the repayments are significantly higher. This is due to the fact that interest is also paid on a single premium policy. The main facts about the policy should be disclosed by the lender but this hasn't always been the case. To make a successful complaint, customers need to find as much information about the policy as they are able to.

  It helps if you can find a copy of the loan agreement. With all this information to hand it makes the process of complaining a lot easier. Some claims are unsuccesful. Some complaints are denied by the loan provider. Now the customer needs to comprehend why the complaint was rejected and what options are available to them. The Financial Ombudsman Service has said that fifty percent of people give up when the complaint is initially denied. Some customers do not understand how to proceed to the next stage.

  There is a lot of advice available online that will assist them with taking things further. For example, there are several insurance related articles which can be found online. Anyone who doesn't want the hassle of all this paperwork can engage the services of a claims company. Claims companies are able to deal with PPI claims usually on a success fee basis. The benefit here is that the customer can leave the company to manage the whole affair. They can simply leave the paperwork for the claims management company to deal with.