Ppi On Your Mortgage: What You Need To Know

If you took out a loan, credit card, overdraft, or mortgage between 1990 and 2010, you may have been sold Payment Protection Insurance (PPI) alongside it. PPI is an insurance product that covers your repayments for a limited time if you are unable to pay due to an accident, sickness, or unemployment. Many people were sold PPI without being informed of the nature of the product, and as a result, there are still millions of people who could be eligible for compensation. To find out if you have PPI on your mortgage, you can usually check by locating your PPI reference number and the name of the bank that sold you PPI.

Mis-sold PPI

Payment Protection Insurance (PPI) is an insurance product that enables customers to insure the repayment of loans if the borrower dies, becomes ill or disabled, loses their job, or faces other circumstances that prevent them from repaying their debt. Many people in the UK were sold this insurance along with their loan without being informed of the nature of the product, and many borrowers had the product without knowing they had it. This resulted in banks settling the issue for billions of pounds, which have been set aside in a fund to compensate those who were mis-sold PPI.

If you took out any kind of consumer loan, store card, credit card, or mortgage between 1990 and 2010, you may have been mis-sold PPI. Many instances of mis-selling involved cases where it was not made clear to customers that the insurance was optional or that it excluded pre-existing medical conditions and the self-employed. It is important to note that PPI is different from Private Mortgage Insurance (PMI), which is a type of mortgage insurance that you might be required to buy if you take out a conventional loan with a down payment of less than 20% of the purchase price. PMI protects the lender if you stop making payments on your loan, whereas PPI protects the borrower.

If you believe you were mis-sold PPI, you can handle the claims process yourself by gathering any relevant documents, such as loan agreements, credit card statements, or mortgage documents that show PPI payments, and contacting your bank or lender directly. Most banks have a PPI claims form that you will need to fill out, and they will investigate your claim and respond to you. Alternatively, you can hire a certified PPI claims company to determine your eligibility, prepare the paperwork, and negotiate with your bank on your behalf. However, it is important to be cautious of third-party firms that may charge high fees or commissions for their services.

The Financial Conduct Authority (FCA) previously announced a cut-off date of August 29, 2019, for making PPI compensation claims. However, there may still be ways to claim PPI if you have a good reason for missing the deadline. The Supreme Court has also handed down decisions that have impacted whether claims relating to the mis-selling of PPI are time-barred, potentially allowing claimants who previously thought their claims were time-barred to argue that they are not.

PPI deadline

If you took out a consumer loan, store card, credit card, or mortgage between 1990 and 2010, you may have been mis-sold PPI (Payment Protection Insurance). PPI was an insurance policy sold alongside loans, credit cards, overdrafts, and mortgages to cover repayments in the event of loss of income due to an accident, sickness, or unemployment. However, it was often sold to people who would never have been eligible to claim on it. In some cases, customers were not properly informed of the nature of the product, and many did not even know they had it. This led to banks settling the issue for billions of pounds, which have been paid out to people who were mis-sold the product.

The deadline for making a PPI claim was August 29, 2019, as announced by the Financial Conduct Authority (FCA). This deadline was set in an attempt to draw a line under the scandal and give consumers a reasonable amount of time to decide whether to make a complaint. Despite this deadline, it may still be possible to bring a compensation claim under Section 140A of the Consumer Credit Act 1974 if the lender was paid a high level of commission for the sale of PPI and did not disclose that to the consumer. This is known as a Plevin claim.

The PPI scandal has resulted in an explosion of third-party firms offering a no-win-no-fee service, and the deadline has likely led to a fresh wave of nuisance calls and texts from these companies. While there is nothing wrong with using one of these firms if you are short on time, it is important to remember that they are in it to make money for themselves and may charge high commissions. In some cases, their 'cut and paste' approach to making a complaint can actually make things worse.

If you believe you have a valid PPI claim, you can start the process of claiming compensation by sending a letter to the bank that sold you the PPI. Templates for these letters are available from sources such as Which? and MoneySavingExpert and usually require minimal information, such as your PPI reference number and the name of the bank.

PPI compensation

Payment Protection Insurance (PPI) is an insurance product that enables customers to ensure the repayment of loans if the borrower dies, becomes ill or disabled, loses their job, or faces circumstances that prevent them from repaying the debt. PPI was widely sold by banks and other credit providers as an add-on to a loan or overdraft product.

In the United Kingdom, PPI was mis-sold and complaints were mishandled on a massive scale for over a decade. Many people in the UK were sold this insurance along with their loan without being informed of the nature of the product, and many borrowers had the product without knowing they had it. This led to banks settling the issue for billions of pounds that have been paid out to people who paid for this product that was improperly sold to them.

The PPI scandal has resulted in an increase in third-party firms promising a no-win-no-fee service, and one consequence of the deadline will likely be a fresh wave of nuisance calls and texts offering to make claims for you. However, with some companies taking as much as 30% commission for processing PPI compensation claims, there has been a growing backlash against an industry estimated to have made around £1.5 billion over the past two years.

If you took out any kind of consumer loan, store card, credit card, or mortgage between 1990 and 2010, you may have been mis-sold PPI. An estimated 64 million policies are believed to have been sold during this period, but only around 12 million people have claimed so far, meaning there are still millions who could be eligible for compensation.

To claim PPI compensation, you can complain to the bank, lender, or broker who sold you the policy. You can also use the free template letters offered by Which? and MoneySavingExpert, which require minimal information, and then send them to the bank to start the process.

PPI claims

If you took out a consumer loan, store card, credit card, or mortgage between 1990 and 2010, you may have been mis-sold Payment Protection Insurance (PPI). PPI was an insurance policy sold alongside loans, credit cards, overdrafts, and mortgages to cover repayments in the event of loss of income due to an accident, sickness, or unemployment. However, it was often sold to people who were not eligible to claim on the insurance, such as the self-employed, or those with pre-existing medical conditions.

If you think you may have been mis-sold PPI, you can start the process of claiming compensation by writing to your bank. You can find free template letters on websites such as Which? and MoneySavingExpert, which are easy to fill in and only require your PPI reference number and the name of the bank that sold you the PPI. You can then send this letter to your bank to initiate your claim.

It is important to note that the Financial Conduct Authority (FCA) set a deadline of 29 August 2019 for borrowers to complain about mis-sold PPI. While this deadline has passed, millions of people may still be entitled to compensation, and fresh legal action is being pursued.

Additionally, be cautious of third-party firms offering a no-win-no-fee service to make claims for you. While this can be a convenient option if you are short on time, these companies can take a significant cut of your compensation, with some taking up to 30%.

Mortgage protection insurance

Payment Protection Insurance (PPI) was an insurance policy sold alongside loans, credit cards, overdrafts, and mortgages. It was designed to cover repayments in the event of a loss of income due to an accident, sickness, or unemployment. However, many people in the UK were sold this insurance without being properly informed about its nature, leading to a scandal that resulted in banks paying out billions of pounds in compensation. If you took out a loan, credit card, or mortgage between 1990 and 2010, you may have been mis-sold PPI and could be eligible for compensation. The Financial Conduct Authority (FCA) announced a cut-off date of 29 August 2019 for making PPI compensation claims.

Now, to address your query about Mortgage Protection Insurance (MPI), it is important to distinguish it from other forms of insurance with similar names, such as Private Mortgage Insurance (PMI) or Mortgage Insurance Premium (MIP). MPI is a unique form of life insurance designed to pay off the policyholder's mortgage if they pass away during the policy term. It helps beneficiaries eliminate significant debt and provides them with access to more equity in the home. MPI also offers coverage for a limited time if the policyholder loses their job or becomes disabled after an accident.

The cost of MPI depends on factors such as the remaining balance on the mortgage loan, the time left on the loan term, the policyholder's age, and the desired amount of coverage. MPI policies typically work like traditional life insurance policies, with monthly premiums paid to the insurer to maintain coverage. In the event of the policyholder's death, the insurance provider pays out a death benefit covering a set number of mortgage payments.

One advantage of MPI is that it offers guaranteed acceptance, which can be beneficial for individuals with health conditions who may struggle to obtain coverage or face high rates for life insurance. However, a drawback is that as the mortgage is paid off, the insurance payout decreases while the premiums remain the same. Additionally, MPI is paid directly to the lender, so it may not provide financial protection to loved ones beyond paying off the mortgage. As a result, a separate life insurance policy might be preferable to ensure financial security for beneficiaries.

Frequently asked questions