Payment Protection Insurance Misselling Information
The topic of payment protection insurance is a slightly controversial one. It appears to be a very useful and valuable tool on paper because it can be used as a lifeline during times of financial need and the inability to make loan payments arises due to one reason or another. But is is also seen by some people as a bad thing, since there is a particular high number of rejected PPI claims when compared with other types of insurance products. So is payment protection insurance good or bad?
Most people believe that the biggest reason behind the cloud of controversy that currently surrounds PPI is the deliberate misselling being done to borrowers by banks and other third party brokers. PPI misselling is basically done when a borrower is forced to take on and pay for this financial insurance product over new loans, mortgages, or credit cards even if they don’t really have a clear understanding of it yet. If you ever get an offer for payment protection insurance from a bank or any other third party lender, the best thing you could do is to go out and do a bit of research and see how you could use it to benefit your current situation before going in head first into the world of PPI.
PPI is another name for payment protection insurance, and whenever borrowers sign up for new credit cards, loans, or mortgages banks and third party brokers approach them with offers for it. It is designed for use during times like sickness, unemployment, accidents, injuries, or death to pay for any currently outstanding loans. Since a borrower is likely to be unable to make loan payments resulting from any of the above-mentioned situations, PPI can be a very convenient thing to fall back on. Not only can a borrower rest assured that loan payments will be fully taken care of while he or she is unable to do it using their salary, but it can help a borrower feel free to take care about more important things like finding a new source of income.
Payment protection insurance is not for everybody. Some people would be far better off if they just completely avoid it. However, banks and third party brokers will continue to do everything in their power to get borrowers to pay for PPI, even if they may never find it useful in their lives. Most of the people who purchase PPI just end up burning a hole in their wallets for no apparent reason. Sometimes, these people may even pay for PPI without knowing about it. This is an example of one of the worst cases of PPI misselling and remains to be one reason why there are a particularly high number of rejected PPI claims when compared with other types of financial insurance products.
Banks and third party brokers deal with missold PPI in several ways. There are times when PPI becomes missold because a lender tells a borrower that purchasing PPI is required for every new credit card, loan, or mortgage that they sign up for. But the truth is, borrowers are free to purchase PPI wherever and whenever they want, and nothing says it is required to purchase it from any particular lender. Sometimes, borrowers aren’t given enough information about PPI and are charged for it even if they don’t know about it. There are other ways in which banks and other lenders engage in PPI misselling. Fortunately, it has become a lot easier to identify signs of PPI misselling nowadays. And it’s worth knowing about them if you wish to avoid having to deal with rejected payment protection insurance claims.