Payment Protection Insurance is an insurance that protects people when they have to pay loans and have no means of paying it. Having the insurance is an assurance that one will have the capability to service a loan even in difficult financial times. In the recent past, there have been cases of mis sold PPI. This is when the policy is sold under false pretences or one cannot claim when he feels the need to. This can happen in several ways and customers need to be aware of this in order to prevent more cases of mis sold PPI. The company selling the policy does not ensure that the policy holder is conversant with all the terms and conditions of the policy. This includes the reasons for having the policy and whether it is important to the customer.PPI Claim

Some customers have been told that the policy is a must. This has mainly happened at the point of sale. In actual sense, PPI has never been compulsory for anyone. This has been used as a trick for gullible customers. People without full-time jobs are not eligible for PPI as they will never be allowed to claim. However, when selling the insurance, students, unemployed, self employed and retired people are allowed to take the policy only to realize later that it is useless. People with certain health conditions are also ineligible for PPI. These include those with history of stroke, diabetes, heart disease and back ache. Anyone with any of the conditions that buys the policy is actually mis sold PPI.

People have been mis sold PPI under false pretences. For example, they are cheated that having the insurance guarantees someone of getting a loan. On the contrary, this is not true. People are also cheated that they can only take the policy at the beginning and from the same company. However, one can take it any other time and from a different company all together. People who are covered elsewhere are also cheated to take the policy.


PPI stands for Payment Protection Insurance. Its purpose was to pay loan or credit card repayments for a year in the event of an accident, sickness or unemployment.

These insurances were sold from the 1990s onwards at a time when staff in financial institutions began to be target and commission driven. Consequently staff did not always fully explain the purpose and scope of the product.

Many people had PPI mis sold to them and the FSA has been active in bringing about appropriate redress.

Applicants for credit facilities had PPI mis sold to them if it was not explained that PPI was an optional addition rather than a compulsory part of the credit application, especially if staff implied that PPI was necessary to make lenders view the applicant more favourably.

A customer was mis sold PPI if he or she was not made aware of certain exclusions under the policy which might make the policy invalid for them at the point of claim. Common exclusions are impending redundancy which the customer already knew about, certain or pre-existing medical conditions and self employment.

Customers had PPI mis sold to them if they had similar cover already, for example an income protection policy or sick pay from work.

PPI was mis sold if the adviser did not advise that the premium would have to be paid as a single payment which would be added to the loan and as such interest would apply to the total amount.

A ‘demands and needs statement’ needed to be issued to the customer for PPI purchased after 14 January 2005 where the adviser has recommended the sale. If this was not issued then the PPI was mis sold

If you were one of the people where you had PPI mis sold to you then you need to instigate a complaint within six years.