If you've ever taken out a credit card, applied for a bank loan or even bought a sofa on credit, the chances are you were offered Payment Protection Insurance. PPI is supposed to cover your repayments on the credit product if you have an accident, fall sick or lose your job. Yet the product itself has been widely criticised and has been the subject of regulatory scrutiny, and rightly so.
There are clear rules that finance firms and advisers have to follow when selling PPI policies – despite this, many firms have been fined by the Financial Services Authority for failings in their sales processes, such as putting pressure on people to buy it. Additionally, our own research shows that at least two million people may have a PPI policy they would never even be able to make a claim on.
Typical ways that people have been mis-sold include when it wasn't made clear to them that the insurance was optional, or that they weren't told about certain exclusions, such as those relating to medical conditions or employment status.
We think that there are students out there who have been affected by this issue too. Which? successfully campaigned to get Ulster Bank (part of RBS) to withdraw their offer of PPI to students applying for a credit card. The policy claimed to pay up to 10 per cent of your outstanding balance if you couldn’t work due to involuntary unemployment, accidents, illness or death. However, to be eligible you had to be working at least 16 hours a week, which was likely to preclude many students.
We were assured by the bank that this had been an error and they withdrew the product from the website, but we still have concerns. How many other students, and ex-students, have fallen foul of wasting money on a product that was useless to them?
So what should you do if you think you or someone you know were mis-sold PPI?
First of all, check whether you have PPI in the first place, eg by checking your credit card statements. Which? did some research last year, which showed that four in ten students don’t know whether or not they have credit card PPI, so it could be worth your while checking.
The Which? checklist tells you about all the other elements that could imply that you were mis-sold.
If you think you've been mis-sold, there are simple steps you can take to try and claim your money back. Which? has a free and simple to use complaints tool that enables you to make a complaint in a few steps, so there’s no need to go through a claims handler, who will charge you for their service.
If you do pursue your complaint and don't get the result you're after, you can take your complaint to the Financial Ombudsman Service. It's worthwhile pursuing the complaint – about 90 per cent of complaints about PPI that go to the ombudsman are upheld in favour of the consumer.
Were you offered PPI when you were a student? Do you have PPI now? Which? are keen to hear from students who think they may have been mis-sold PPI, or who have already put in a complaint to their provider about it. If you have any experiences in this area, please let Which? know at lucy.widenka@which.co.uk