Payment Protection Insurance (PPI) is an insurance policy intended to cover your monthly repayments if you are unable to work due to sickness or unemployment. Also known as Accident, Sickness and Unemployment (ASU), Mortgage Payment Protection Insurance (MPPI), Personal Loan Protector (PLP), Credit Card Repayment Protector (CCRP) or something similar dependent on the company.
If you have a Credit Card it is likely that you have some form of Payment Protection or Card Protection on your account. This type of cover works in exactly the same way as any other type of PPI, except for one small detail, it has been described by the consumer group Which? as:
A useless and badly designed product
So what is the problem?
PPI on a credit card is a fairly complex policy sold in an overly simple way. The exclusions and terms are pretty similar to most other types of PPI but the premiums are calculated based on the outstanding balance each month. Unlike any other type of insurance the underwriting (checking whether you have a valid claim or not, or whether you are covered or not) is not done until AFTER you make a claim! With any other type of insurance the sales person will check with the insurance company BEFORE selling the policy that you can make a claim and are covered. Which means that you can take out a PPI policy on a credit card pay the premiums for many years but when you try to make a claim are told you are not covered and cannot receive the benefits!
Most credit card companies sell PPI without giving you any advice and tell you it is up to you to ensure you can make a claim and that you are covered. This again is unlike most other types of voluntary insurance. If you buy a life insurance policy the sales person will ask you lots of questions about your health and about your medical history to ensure you can claim and also the underwriting is done before you agree to buy the policy. If you are told you can’t make a claim you won’t buy the policy.
We have calculated that if you have a PPI policy on a credit card and have an outstanding balance that remains at around the same level continuously you will pay more in premiums than you can receive in benefits within approximately 7 years! This is reduced even further if you transfer a balance onto your account immediately as you will start paying higher monthly premiums immediately. If you are not going to be better off in the event of a claim would you still take out the policy? And don’t forget that even if you do make a claim you still have to pay the premiums each month on your credit card!
And what can I do now?
If you think you have been mis-sold PPI on your credit card you can of course make a complaint to your credit card company yourself and ultimately take the matter to the Financial Ombudsman Service. Or you can ask Claim 2 Gain to make the complaint on your behalf.
If we deal with your complaint we will make a claim for the refund of 100% of the PPI premiums you have paid. Most of the High Street banks have been heavily criticised for the way they have been handling customer complaints and our experience has shown that many credit card companies will initially make offers that are wildly inaccurate and do not represent a correct refund. If you want to get a FULL refund you need to know the facts and unfortunately your credit card company is unlikely to give you the full facts or a full refund. Make sure your complaint is in the right hands, make sure you know what you are entitled to or you are using a company that knows what you are entitled to.
If you want to use the services of a company that has over 9 years of experience in dealing with financial services complaints, knows the regulations and knows what you are entitled to then you should complete our Quick Claim form, on the right, and we will deal with your complaint and ensure you get back what’s yours.
In the event of a successful claim for the refund of PPI premiums paid on a credit card any refund you receive will be used to reduce any outstanding balance on your account in the first instance, even if your account is up to date and you are maintaining payments, if this puts your account into a credit balance you can request this money is paid to you by cheque – you will remain liable to pay our fees from the refund you receive.
If you want to ensure we are looking at EACH and EVERY credit card or store card you have had, get a FREE credit report from CHECK MY FILE or EQUIFAX by clicking on one of the logos below: