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PPI – What is it?

There has been a lot of attention recently in the national media about the issue of PPI. In this piece we hope to answer some of the most common questions that are now being asked – What is PPI?

How does it work? What is all the controversy about? What can I do now?

PPI (Payment Protection Insurance) is an insurance product that covers an individual’s repayments in the event that the individual is unable to meet these repayments themselves. PPI policies are most commonly sold by financial institutions in conjunction with personal loans, credit cards and mortgages and they are intended to cover individuals in the event that they lose their job, become ill or face other circumstances that prevent them from earning income to service the debt.

The topic of PPI is being covered in the national media now as it has come to light that a large number of individuals may have been mis-sold PPI policies. This follows a similar controversy in the United Kingdom were it was uncovered that a staggering number of individuals were mis-sold PPI policies.

As is the case with all insurance policies there are detailed terms and conditions which specify exactly who may be covered by the policy and in what specific circumstances a claim may be made. A lot of PPI policies state in the terms and conditions that the policy does not cover individuals that may be self employed, retired, unemployed, on a fixed term contract or have a pre-existing medical condition. These categories of individuals make up the majority that were mis-sold PPI as the financial institutions selling the product rarely qualified if the individual would ever be able to make a successful claim under the policy should they ever need it. Essentially, a large number of individuals were sold insurance policies that they could never use.

Since August 2007 over 300,000 PPI policies were sold in Ireland and the Central Bank has announced this week that it is investigating seven major financial institutions in regard to the issue.

Individuals that were mis-sold PPI policies are entitled to a refund of the amounts they paid to the financial institution. Given that the cost of a PPI policy can be quite high and when one considers the monthly payments over the life time of a loan or a credit card the potential refund can be significant. Click here to start your PPI reclaim now.