What is PPI?
What is PPI? Have You Been Mis-sold?
What is PPI? Payment Protection Insurance (PPI) is a form of insurance that was designed to cover repayments on any form of credit (loans, credit cards, store cards etc.) in the event of sickness, unemployment death or any other form of circumstance that may result in the consumer being unable to pay the repayments on the credit they have taken.
Initially it was a good product, and had it been sold correctly then it would likely still be a useful product even to this day. Unfortunately, this was not the case, with brokers, banking staff and many other "salespeople" being urged to sell the product to consumers even if it was not required. This is not the only mis-selling factor, but is a large part of the reason why PPI mis-selling complaints are an ongoing occurrence that we hear about on a daily basis.
Another factor that has recently been announced by the FCA, after an extremely important Supreme Court win by a lady named Mrs S. Plevin, has shown that not only was PPI initially mis-sold, but in the majority of cases, the broker/bank would not inform the consumer the amount of commission they would be due to receive as a result of them selling you the policy. This commission is the most likely reason that PPI was being pushed upon consumers, even though it was not needed.
Even industry insiders have admitted that it was a very lucrative industry when it came to selling consumers PPI, with a Mr Cliff Darcy (who worked in a PPI department at various banks for 11 years) confirming this in an interview with the BBC. He also goes on to state: "My colleagues and I knew there was no question that we were working in a corrupt industry, making vast profits from consumer innumeracy.
In the early 1990s, PPI was a useful product, but over time it became a cancer riding on the wave of the consumer credit boom." There has also been an interview with Bill Michael, head of UK financial services at KPMG in which he stated: "Product became king. It was more important than customers, who were force fed by the banks. It gathered momentum over time until entire remuneration and reward models were built around how many products were sold without always testing their appropriateness."(Source)
As a result, many companies have emerged in order to assist in the reclaiming of PPI compensation. They have received much of the "bad press" over the years due to many of these companies making unsolicited or "cold calls", and rightfully so, but here at My Claim Solved we will never do either.
Claims management companies do take a percentage of the money you win in PPI compensation, but you are paying for a service. If you wanted to build a house, would you pay a builder or do it yourself? Most people would pay a builder because you want a skillset and experience you do not have. You pay for the service, expertise and the convenience. This is the same with many claims management companies.