racket’
The selling of payment protection insurance (PPI) has come under
attack in the past few days, after the launch of a campaign urging
consumers who purchased the product to find out whether they are
entitled to claim a refund from their finance provider.
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Martin Lewis, the “Money Saving Expert” and well-known media
figure, has launched an all-out assault on the “protection racket”
of PPI, which he claims has been subject to “severe” mis-selling in
many cases.
He provides templates on his website, http://www.moneysavingexpert.com/,
which aggrieved PPI customers can download for use against the
companies that they feel may have sold them PPI policies in an
unfair manner.
Lewis said that many people were sold unsuitable policies on
which they were not entitled to make claims – for example, he
mentioned unemployed people being sold policies which cover loss of
earnings but which specifically exclude anyone not in full-time,
paid employment.
It is claimed that there are around 20m active PPI policies in
effect in the UK, with £5bn worth of premium income flowing to the
finance industry every year.
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By GlobalDataLewis said: “Of the 20m [PPI] policies in the UK, I wouldn’t be
surprised if half had been mis-sold.
“Some have this insurance without realising it or were told it
was compulsory when it wasn’t, others are paying for it when it
doesn’t actually cover them.”
Referring to the recent consumer claims against bank charges,
which have cost UK banks many millions of pounds in settlements and
refunds, Lewis added: “I think PPI reclaiming could be bigger” –
worrying words indeed for insurers and financiers.
PPI is already the subject of investigations by the OFT and the
FSA, which is conducting a thematic review.
