Credit insurance or most commonly known as PPI is a form of protection coverage that is introduced to benefit the consumers. It is commonly sold with all type of loans approved by banks and other finance companies, to ensure that they get back the loan amount even if the borrow is permanently or temporarily out of work, disabled, death due to accident at work or home, etc.
It mainly covers you for the repayment of debts if your main source of income stops due to any of the valid reasons. Since it comes along with the credit documents, most of the borrowers are not aware of it. Once you have paid the entire loan money within the specified time, you could claim back the premiums you paid for this insurance.
Why should a borrower claim?
Financial Services Authority has fined many finance companies for miss-selling Credit Insurance to their customers, without them knowledge. Therefore, you have the right to claim the amount you paid for the mis-sold policy. Moreover, when you have repaid every penny borrowed to your lender, and thus, you need no coverage.
How to know when to claim PPI?
Most type of the unsecured and secured debts like credit cards, store cards, car finance, home loans and others can be easily claimed for. It depends upon the amount and the duration of the debts. If the policy is six to ten years old, you could file a claim. If duration of ten years has passed since you made the last payment towards your outstanding balance, it is little difficult to get the total money back.
There are many genuine companies that will help you get your compensation back in a more organized and quicker way. Most of the time financers settle the payment without any hassles, but if a need arises, then you could approach any of the claims lawyers for guidance.
How much time it takes to get the claim money back?
It will take a few weeks if you have the original loan documents signed by the lenders, or you could ask the creditors to send you a copy. Your finance firm will take at the most four weeks to send the original papers. The legal procedure will be easy if you have all the payment slips as well. Most of the claims management services do not charge fees for initial consultation. You only need to pay them if you win the case.
What if the lender is in financial loss or the firm has been taken over?
You can reclaim from Financial Services Compensation Scheme who is the responsible party for the de-function lenders. The new owners will need to pay back the customers money when demanded.
What are the indicators of mis-selling of PPI?
The sales representatives of the finance company may make it compulsory for you to buy it while approving the loan amount you applied for. However, it is an option and you are could choose to buy it only if you need it and are eligible.
Sometimes, the loaners do not even inform you about it and added it to your loan.
Being vigilant will help you from any such hassles. Also, if you happen to see an unauthorized charge from PPI, you now know that you can claim for the funds back on your know or with professional assistance.