It stands for Payment Protection Insurance, it was billions of £'s of mis selling of protection insurance against loans and credit cards. It was supposed to protect you against losing your job the insurance would pay the loan / credit card premiums.Burnaby49 wrote:Could you explain to we non-British what you are talking about with this PPI/Liability stuff?Normal Wisdom wrote:Last year I met a chap who wanted to reclaim the PPI premiums supporting a personal loan even though he admitted that he had asked the bank to include PPI and had made a claim on the policy when he lost his job!
The problem with it were many and varied
wouldn't pay out if you were self employed, but they'd add it to loans without checking you were eligible,
Wouldn't pay out if you were in receipt of work based sickness benefits,
it was added on when people didn't actually work (ie were pensioners),
in some cases only covered you for the first 5 years of a 10 year loan,
the premiums were higher then you could actually reclaim,
In the first year or so of paying a loan with PPI the loan premiums actually went to paying off the insurance. Which meant if you wanted to redeem the loan early hardly any of the premiums paid actually went to the loan so you still owed about what you'd taken out, plus interest.
People were told it was compulsory to have it.
Basically, people who signed you up for the loans / cards were paid a bonus if they got you to sign up to PPI, so in lots of cases they just ticked the box on the loan application and got you to sign it without even asking if you wanted it or just told you you had to have it to get the loan.
Huge mis selling scandal.