Mis-sold PPI on loans
Banks and lenders sold PPI alongside loans to more than 20 million people during the last few decades, earning billions of pounds in profit.
However, lots of these insurance policies were mis-sold. It was often done quite easily compared to credit cards and other products, due to the large size and length of most loans; they typically last as long as ten years, making it more likely that a customer would not be in work at some point during the loan.
Because customers were supposedly at a greater risk of being without work and therefore missing their repayments, they were frequently pressured into taking out PPI with their loans.
How was it mis-sold on Loans?
PPI was mis-sold on a very wide basis, with the Citizens Advice Bureau finding that only 15 to 20 per cent of people with a PPI policy managed to successfully make a claim, significantly lower than motor insurance claims (74 per cent) and household claims (55 per cent.
It was also common for loan applications to require you to opt-out of purchasing PPI, without mentioning it in the application, leading to many people purchasing it with no knowledge of this. Even if this didn’t occur with your first loan, it may have happened on a new loan you took out later on, again without you even requesting to have it.
There are a number of other ways in which PPI may have been mis-sold, aside from if you simply had no knowledge of having PPI attached to your loan:
- You may have felt pressured into getting PPI, with the sales person effectively forcing the deal onto you. If you didn’t need the policy, then you may have been mis-sold.
- If you were under the impression PPI was required in order to be successful in your attempts to secure a loan, then you may have been mis-sold. PPI has no bearing on the likelihood of a lender deciding whether to grant you a loan, and it is an optional product.
- Did you have the costs explained to you in detail? The seller should have provided you with a clear breakdown of the separate PPI costs, rather than including them within the loan costs. Failing to make clear the PPI was a separate cost could mean you were mis-sold.
- Were you made aware of all the exclusions and terms of the policy? If you did not realise that having a pre-existing medical condition, for example, could result in you not receiving a payout, you may have been mis-sold.
- Did the seller discuss your employment status with you beforehand? If you were a student, a part-time worker or unemployed at the time you took out the loan, you may not have been able to make a claim anyway, so you could have been mis-sold.
How much can I reclaim?
The amount you can reclaim varies from person to person, but you may be able to claim back hundreds of pounds as a result of being mis-sold PPI on a loan.
Be aware that it doesn’t matter if you have reclaimed PPI on other products (such as credit cards and mortgages) before, because each claim is separate. To start your claims process, complete our online enquiry form.
Loan Providers who are facing mis-sold PPI Enquiries
The following is a list of loan providers who are known to have sold PPI. Please note this is not an exhaustive list.