Rising Childcare Costs ‘Harming the Economy’
January 14, 2014
PPI Claims Deadlines and Time Limits Explained
January 15, 2014
Show all

PPI stands for Payment Protection Insurance, it’s a type of insurance you can buy to cover your repayments on a loan, mortgage or credit card should you be unable to make the repayments for a specific set of reasons.

PPI has been sold in the UK for over 20 years, mostly packaged into borrowings at the point of sale or in the case of credit cards it was sometimes sold at the point of card activation. Upon signing for the agreement, whether in person or online you would be asked whether you wanted PPI to protect your repayments, if you did want the cover then a monthly cost would be applied to your account proportionate to the balance of your borrowing. This is where a lot of the recent mis-selling occurred as lenders included PPI without asking the customer or made it impossible to get the loan unless PPI was taken too.

Single Premium and Monthly PPI

PPI came in two main forms, monthly payments based on the outstanding balance and Single Premium. The latter involved the whole cost of the PPI cover for the life of the loan being added as a lump sum at the start, resulting in the customer paying interest on both the loan and the cost of the PPI. Unsurprisingly Single Premium policies caught the attention of the City Watchdog and after threats to ban them in early 2009; most lenders removed them from their product range.

Every bank and lender had a different name for PPI, including:

– PPI / Payment Protection Insurance

– ASU / Accident Sickness Unemployment Cover

– Credit Insurance

– Credit Protection Insurance

– Loan Repayment Insurance

Whatever it was called, the principles of PPI were the same – if you get ill or become unemployed and cannot make your repayments then the policy steps in. This is another area of PPI where a lot of mis-selling occured as policy providers often refused to step in and cover the repayments stating that the customer’s situation didn’t meet the eligibility criteria. Subsequent investigations have revealed that this was mostly due to sales advisors not checking whether the customer was eligible for cover when selling it to them, for example they were older than the upper age limit or were self-employed.

You can still buy PPI

In 2009 the Financial Services Authority (FSA), now the Financial Conduct Authority (FCA) banned the sale of PPI alongside loans and credit cards, with lenders having to wait seven days before they could contact the customer about cover. The idea was to stop pressure selling and mis-selling as well as open up the market to healthy competition from independent insurance providers. Today you can still buy PPI and the choice of policies and providers is far greater than ever before.

Shortcut summary: PPI stands for Payment Protection Insurance, it was sold alongside loans, credit cards and mortgages to cover the repayments if the customer couldn’t afford them due to ill health or lack of employment. It has been extensively mis sold over the last 20 years with banks and lenders having to refund over £18bn to customers.

This is part 1/15 – continue your PPI claims education…

PPI Claims 101 – 1/15 | What is PPI?
PPI Claims 101 – 2/15 | Should I Bother Making a PPI Claim?
PPI Claims 101 – 3/15 | How To Claim Back PPI Yourself
PPI Claims 101 – 4/15 | How To Find The Best PPI Claims Company
PPI Claims 101 – 5/15 | No Win No Fee PPI Claims Explained
PPI Claims 101 – 6/15 | What is a PPI Template Letter?
PPI Claims 101 – 7/15 | Credit Card PPI Claims
PPI Claims 101 – 8/15 | Mortgage PPI – The Hidden Windfall
PPI Claims 101 – 9/15 | PPI Claims Deadline – Forget One, Remember The Rest
PPI Claims 101 – 10/15 | The Information You’ll Need To Make a PPI Complaint
PPI Claims 101 – 11/15 | What To Do If Your PPI Claim Is Rejected
PPI Claims 101 – 12/15 | The Financial Ombudsman & PPI Claims
PPI Claims 101 – 13/15 | Payment Protection Insurance Consumer Questionnaire
PPI Claims 101 – 14/15 | How Long Does a PPI Claim Take?
PPI Claims 101 – 15/15 | Do I Need To Pay Tax On My PPI Refund?

Think we’ve missed something? Recommend a topic using the comments section below.


By John Gregory

John writes for a OracleLegal.co.uk as well as a number of financial blogs, he also create content for infographics, FAQ’s and personal finance sites. You can find him on Google+ and Twitter, get in touch – he doesn’t bite. Unless you’ve been mis-selling financial products.



MARCH 23RD 2020

At this time we are continuing business as usual however our team will now largely be working from home. This limits our phone contact availability. Customer support remains available Monday to Friday but please email in to info@oraclelegal.com with your query. We aim to get back to you within 48 hours. On receipt of PPI refunds our fees remain payable and can be paid via our website www.oraclelegal.co.uk/payments/ or via BACS. We are also working on some other areas of potential claim for you in connection with your PPI and will be in touch shortly where applicable to present this to you.

IMPORTANT:The last day we can accept a new claim is Friday 23rd August – midday – to ensure the paperwork is properly processed and lodged with your lender before the cut-off time.