Piggy banks

Don’t delay taking action for your unwanted PPI

PPI, or Payment Protection Insurance, is a curious financial scandal that has broken out since the beginning of this decade. Payment protection insurance is a valuable financial product in nations all around the world, enabling consumers to pay for coverage that will pay a mortgage or other large loan in the event that they are suddenly unable. But PPI is only a good thing if you want it. For the hundreds of thousands of Britons who didn’t want it, but found themselves paying for it anyway, PPI has proved to be a scourge.

Today, an estimated 3 in 4 British people understand the PPI scandal. For those just catching up with the news, the problem with PPI isn’t so much in the coverage it provides; it’s in the way it was passed out to consumers all around the nation. For those of you who have never purchased a house, it’s an arduous and time-consuming process. This is especially true for first time homebuyers. The documentation alone has been known to befuddle the best of us, and most people sign each page very quickly without so much as glancing at what is written on each page.

This is where many British borrowers went wrong in 2010-2011. Hidden amidst the dozens of pages of legalese, in many loan contracts, was an offer for PPI. Nearly everyone who signed up for it did so because they were just tearing through the mountain of paper, not because they desired, or had even considered, the service for which they were about to sign. But sign they did, and monthly payments started being pulled from their accounts, just as soon as they took possession of their new home or motorbike or what have you. Monthly payments continued indefinitely, or until the unsuspecting policyholder happened to notice payments being drafted from their bank accounts.

This is where the scandal began. Thousands of angry consumers wanted to know what PPI was, why they were paying for it, and who to sue for their lost money. And sue they did. Class action lawsuits emerged by the dozen, and Britain’s largest banks have now divvied out over twenty five billion pounds in restitution, with more on the way. Even so, more people continue to hear about PPI for the first time. And many of them go on to discover that they, too, have PPI payments being auto-drafted from their bank accounts.

This might be you as well. It’s important to check all of your checking, credit, and savings accounts: anything from which regular payments could be taken. If you see anything that looks unfamiliar or suspicious, follow up through your financial institution. If it turns out to be PPI, seek out help fast, because the deadline for claiming PPI is fast approaching. No date has been set as of yet, but the powers that be have reported that this is the year. Banks don’t want to pay any more fees to the customers they defrauded. If you have signed any complex borrowing paperwork, you may have been exposed. Be your own advocate. Check your bank statements and take the necessary action if you have unwanted PPI.

Photograph by Low Jianwei

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