Thread: Credit card Payment protection insurance

Having reviewed all my finances recently I was confused to find a 90 quid mystery on a credit card account (egg)

With absolutely no idea about it I was being charged 90 quid a month for PPI

I've had the card since 2005 and have always relied on direct debit paying off the balance........................ I'm a slack f.u.cker

When the penny finally dropped, Egg got back to me and explained over the 5 years I've spent 5400 on "payment protection insurance"

I never agreed to this and other than my slackness with my admin I'm not responsible for it

Egg are flapping and saying they will pay it back......................

Its definitely worth enquiring about your cards and what you are paying fro because they are slippery bastards and you are more than likely to be refunded for random money that has been added to your credit accounts

MONEY SAVING EXPERT

RANDOM SECTION from money saving expert.com

You could have it without knowing...

Heavier regulation means this is less likely in the last couple of years, but many people still have loans from when the picture was a bit like this:

You want a £5,000 loan over five years. You’ve seen it advertised at a cheap 7% rate, so you call up...

You: “I’d like a £5,000 loan over 5 years please.�
Bank: “I presume you’ve seen our competitive interest rates.�
You: “Yes, can you give me a quote please.�
Bank: “Sure, our fully protected loan is £125 a month.�

Now most people would find it virtually impossible to mentally calculate how much the monthly repayments should be, so £125 sounds fine.

It’s a brilliant hustle. The answer contained two little words that make ‘em a fortune - “fully protected�. They mean you’re also being flogged expensive insurance.

Actually the cost of the loan at 7% should be £100 a month, the remaining £25 is to pay for the insurance. That means if you’d just got the loan you’d have repaid the £5,000 borrowed plus £950 in interest.

Yet the insurance adds £1,500 over the life of the loan; that's MORE than the interest cost and it's almost pure profit for the bank!

Many people have this cover which is unnecessary. And even those for whom it is necessary are probably paying four times more than you need to, if you got it through your lender.

The PPI industry has never been in so much trouble

FSA: The financial regulator has been fining PPI companies left, right, and centre, for “not treating customers fairly�, plus the Competition Commission has investigated the market and made a number of demands on lenders, including banning sales within a week of selling a credit card or loan and totally banning single premium polices.

FOS: The Financial Ombudsman (FOS) has also complained to the regulator that it thinks lenders are "deliberately trying to obstruct the Ombudsman process". It thinks some lenders have been rejecting ALL consumers attempts to reclaim, and in 2008-9 89% of cases dealt with by the Ombudsman are decided in the consumer's favour.

In Sep 09, for the first time, the FOS released details on company-by-company complaints data. Some big name lenders (Black Horse, Capital One, Egg, Lloyds TSB, Northern Rock, RBS, Barclays and MBNA) all had over 90% of insurance (primarily PPI) complaints found in consumers' favour at the ombudsman. See news story for full detials.

Court: Also in Sep 09, a County Court judge ruled for the first time that a woman who'd been missold Payment Protection Insurance with her credit card, could have her entire £8,000 debt wiped out. See the full MSE News story: PPI debt wiped out.

So if you’ve got a case, write and complain but ASSUME you'll be rejected. Don't bat an eye and just keep going to the Ombudsman. To reclaim, you’ll need to write up to three letters (there are template letters for all of them here) the last being to the Ombudsman, though there's a chance you could get a payout sooner.

As all of this is free, the worst case scenario by reclaiming is you lose the cost of three stamps.

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There’s nothing wrong with PPI for those who need it. It’s job is to cover loan or card repayments in case of accident, sickness or unemployment (or sometimes just accident and sickness). This is especially useful in current climes.

Yet if you got a PPI policy from your lender, it's likely you’re paying MASSIVELY over the odds, so you should first check if you can get the same elsewhere for less. There are a number of things to be aware of...

•The insurance cost isn’t in the APR

If you get a loan with insurance the interest rate (APR) you pay is irrelevant: an 8.5% loan can be cheaper than a 7% loan. This is because the APR doesn’t include the insurance cost, just the cost of the interest (see Cheap Loans guide), enabling lenders to hide expensive insurance.

•You may only be able to claim for one year

Tell them that you want £10,000 back otherwise you'll name and shame them on the internet.

Good advice. I've got one going through now which should net me a £1500 credit on a £4500 balance.

I had PPI 'covertly' added after I took out a bridging loan, but I cancelled the subsequent secured loan. As I pointed out to the ombudsman,'Why would I insure an UNSECURED loan?'

PS. Less than 1 in 20 PPI schemes actually pays out. They are not worth the paper they are written on!

Egg has been fined millions for this scam.

When i realised what was going on they fired up all the PR stuff to minimise their exposure

I reckon loads of blokes are being invisibly fecked by this

Originally Posted by walt_of_the_walts

Good advice. I've got one going through now which should net me a £1500 credit on a £4500 balance.

I had PPI 'covertly' added after I took out a bridging loan, but I cancelled the subsequent secured loan. As I pointed out to the ombudsman,'Why would I insure an UNSECURED loan?'
PS. Less than 1 in 20 PPI schemes actually pays out. They are not worth the paper they are written on!

my highlight exactly

Jus got a letter from Egg
refunding 3,200 quid and 600 quid interest

Bit of a result, quick to didn't even have to do owt just one call

My thinking is this super quick offer is done to close down the claim. I think the moneysaving expert says hold out for more.

The letter says I'm still within my rights to go to the financial services ombudsman

It depends what you want to do.

Soldiers, contractors and those with rock steady jobs should never buy PPI cover: it is simply a waste of time. However for those people who don't fall into the above categories, and do not have other insurance that would cover the cost of payments while unemployed or ill (or dead), it can make sense.

So only 1 in 20 policy pays out? Thank God for that. Would you like to take a 5% chance of being screwed over? Just because a loan is unsecured doesn't mean the bank cannot come chasing after your assets if you are unable to pay: it just takes them a little bit longer.

Have you been paid back every penny that they owe you? Is the interest rate reasonable? If so then move on. If not, then tell them to recalculate with a rate of return that you would expect to get if that money had been in a bank.

Only a Jeremy Kyle watching cúnt will now demand "loadsa money 'cause my human rights 'ave been hurt. Innit?" it is fair and reasonable to have reparations. It is a complete tősser who expects to make a profit out of someone else's mistake (which has been rectified).

The interest is at 8% which is below what the card interest would be

My maths is shoite but I reckon I'm still out of pocket a bit

I'll look in to it, see below for discussion on it

http://forums.moneysavingexpert.com/....html?t=524031

Not only can you reclaim it but you should get contractual & compound interest, see; http://consumeractiongroup.co.uk/for...insurance-ppi/

Originally Posted by Dread

So only 1 in 20 policy pays out? Thank God for that

Perhaps I should re-phrase that. Only 1 in 20 claims on a PPI policy successfully clear the balance. Some just pay the interest until you can make repayments again, but you can get that for free from most lenders anyway or an IVA or debt relief order will do the same. And some just refuse any assistance at all.

PPI on an unsecured debt is never worth it, regardless of your employment security.

It's like the other well worn scam, extended warranties.

I think 8% across the board for all PPI refunds was set by the regulator's so i dont think you would get a better rate but feel free to look into. And yep it's not worth the paper it's written i used to work for a bank that sold it on personal loans and we would be told when someone made a successful claim they were few and far between. It was all very regulated when i was doing it this was after the scam was exposed but the article is true the old hands used to tell me they just gave a monthly repayment figure with the insurance on top with no mention of it being optional. In summary a load of sh1te, expensive sh1te