The Personal Protection Insurance UK Racket

According to the Citizens Advice Bureau, the personal protection insurance UK racket is perhaps the largest and most financially devastating racket to ever hit the lending industry. Lenders have been mis selling personal protection insurance for just about a decade and millions of consumers have fallen prey to paying an extreme amount of money for a cover that is virtually nonexistent. Whilst protection insurance can be sold to businesses and private consumers alike, more often than not it is private individuals who have had the mis fortune of paying for payment protection insurance UK policies.

Expensive Mis Sold PPI

In order to understand the gravity of the situation, it is important to understand just how expensive personal protection insurance really is. The cost can range anywhere from 13% to 56% of the amount being borrowed and, believe it or not, in some extreme cases it has cost more than 60% the amount of the loan! Lenders would have you believe that getting a personal loan is either dependent upon purchasing insurance or that the amount you could qualify for would be increased by carrying protection insurance. Sometimes they don’t even bother to tell you that they are adding PPI to your loan and you are left wondering why your monthly repayments are so high.

New Legislation Helps to Prevent Future Abuses

Fortunately, government has passed legislation whereby borrowers cannot buy payment protection insurance within a 14 day period after the loan has been agreed. This should help to prevent the mis selling of a PPI claim in many cases in the future but does nothing for those who have already been mis sold PPI. In this case you would need to file a claim to get a refund on premiums and interest paid to date. Although steps are being taken to prevent future mis selling of personal protection insurance UK policies, there are still millions out there that need to be reclaimed.