Payment Protection Insurance, or ‘PPI’, is insurance designed to cover credit payments in case of accident, sickness or unemployment. Because of this, it is also sometimes known as ‘ASU cover’. PPI was sold by banks and lenders alongside a variety of financial products, including loans, mortgages, credit cards and finance agreements. In many instances, the PPI was unsuitable for the customer and would not have been purchased but for the various mis-selling practices adopted by banks and lenders. Some of the most common mis-selling practices included neglecting to explain that the PPI was optional or implying it was compulsory and deciding not to discuss crucial aspects of the policy, such as the exclusions and limitations and the ‘cooling-off’ period.

Self-employment PPI was a particularly bad deal for self-employed persons, because it frequently only provided cover for those in employment. This means that, whereas an employee of a business would be covered if made redundant, a self-employed plumber, for instance, may not be covered if the work “dried up” or contracts were lost. Even where self-employed people were not explicitly excluded from the policy, there would often be significant restrictions and limitations on when they could claim. Additionally, a couple of the most common reasons for making a ‘sickness’ claim were often excluded from PPI policies. These were associated with mental health problems and back problems. Therefore, a builder who suffered a slipped disc would not be eligible to claim. Similarly, those not able to work because of stress or depression would not be able to benefit from the cover. Sometimes, particular roles, like taxi drivers, were explicitly excluded from the policy.

Other exclusions relating to employment Often, even people in employment would find themselves not able to claim under their PPI policy because of the exclusions within the small-print. As an example, policies usually excluded people working fewer than 16 hours per week, people on temporary contracts and, occasionally, agency workers. Further, people who worked full-time, but for several different employers, might not have been covered. If you accept early retirement or voluntary redundancy you are unlikely to be allowed to claim and some policies exclude claims should you be dismissed for misconduct. Retired people and students, who are not in employment, would also clearly be excluded from the advantages of a PPI policy.

Mis-selling Banks and lenders were obliged to assess if the PPI policy was appropriate for your demands and needs. If you were self-employed, you were not questioned on your employment status or you fell within one of the other exclusions, the plan was not suited to you and also it is likely that it was mis-sold.

Defence Your bank or lender is unlikely to possess a defence to a claim for a PPI refund if you were unemployed, self-employed, retired or a student when you purchased the policy. Although you won’t be entitled to a refund if the lender is able to establish that you would have obtained the PPI “but for” the mis-selling, this is unlikely to apply to such customers, who would surely not have bought the policy had they been made aware of the fact that they could be ineligible to make a claim under it. If your employment status fell into one of these categories at the time you purchased PPI, you might be eligible for a full refund, plus interest.

For further advice on mis-sold Nationwide PPI claims or other bank or financial institutions visit PPI Claims Online

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Tags: claim back ppi, insurance, Payment Protection Insurance mis-selling, ppi claims, Reclaim PPI payments

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Posted in insurance by Paula Peterson No Comments Yet