PPI Frequently Asked Questions

Payment Protection Insurance (PPI), has come to the fore of the UK financial sector in recent years, because of its controversial workings. Consequently public interest has increased in it. Here are some frequently asked questions with regards to PPI.

What is PPI?

Payment Protection Insurance (PPI) is a form of insurance that covers a borrower in the occurrence that they become unable to service their debt repayments. For example, they may lose their job, have an accident or become disabled, The PPI is sold so that, if claimed, it will allow for the loan repayments to be covered until the person in question becomes able to pay for themselves again.

What is controversial about PPI?

PPI has come under severe controversy in the past decade because of the substantial misselling that took place in the industry. People might be paying for PPI even if they are ineligible or hadn’t even opted for it in the first place.

For instance, it had been wrongly labelled by financial institutions and brokers, as something that is required for the loan to be approved. In some cases, it wasn’t even explicitly mentioned in the loan agreement.

In the wake of a judicial review in 2011, significant fines have been imposed on banks and customers who were missold the PPI policy are eligible to a refund on all payments made under it. Furthermore, lenders are not allowed to sell it without explicit approval of the buyer after they are duly informed of it.

What is PPI sold on?

PPI was sold in tandem with almost all credit products. These include home mortgage loans, car loans, personal loans, etc. PPI is also sold with credit cards.

How do I know if I have PPI?

If you took your loan out prior to October, 2011, chances are that you might be paying for a missold PPI. In that case, look for PPI charges in your paperwork. Care must be taken here with regards to the terminology because there have been instances where a bank use in-house terms for PPI charges. These include loan care, payment cover, card protection, repayment cover, etc.  If you find one such charge, contact your bank or broker.

In the wake of the judicial review and the flood of claims that followed, some banks have even started to email or write to their customers with regards to missold PPI. So, if you receive such a communication, you should immediately contact your bank and claim your refund. However, don’t just sit there for the bank to contact you. Chances are they might never do so.

In what instances can I make a claim?

You can file for a claim with regards to the PPI in an instance of misselling. Misselling of PPI is characterized by several ways. Here are some of them:

  • The PPI policy was sold as mandatory.
  • The full costs of the policy were not disclosed.
  • The policy was sold without your consent or knowledge.
  • You were self-employed at the time of buying the policy.
  • You were under 18 years of age at the time of buying the policy.
  • You were over 65 years of age at the time of buying the policy.
  • You had a preexisting medical condition at the time of buying the policy, which was not covered by it.
  • You were paying for PPI even after retirement.
  • Your claim for PPI was rejected (there might be an underlying eligibility issue that was ignored by the policy provider at issuance).

In short, these are some of the reasons why the PPI policy may be missold to you and consequently, you could be entitled to a full refund. They may not apply to you but it is always better to contact your bank if you are in doubt.


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