Payment Protection Insurance (PPI) was applied to a number of different types of borrowing facilities. In fact, the vast majority of borrowing facilities had PPI attached to it, in one way or another. PPI could be made on regular payment PPI premiums, which were normally found on credit cards or shop store card facilities, or by way of a lump sum payment, which was normally attached to the larger facilities, such as personal loans, or in some cases, secured loans.
Below is a list (but not exhaustive) of all the types of facilities that PPI could have been attached to: –
- Credit Cards
- Secured Loans
- Hire Purchase (HP)
- Car Finance
- Store Cards
- Sofa and Bed Finance
- Anything else that the Banks would lend to you – they would stick PPI on.
Since the inception of PPI, certainly into the mainstream lending that was provided by the main High Street lenders (such as Lloyds, HSBC or Midland as they were then known, Barclays, NatWest and Royal Bank of Scotland which was around 1980s) they developed a cunning plan that for the vast majority of any product that they promoted, that it had PPI attached. It generated vast sums of money by way of profitability, and of course, cash-flow for the Banks as interest was added on top of the cost of the financial product in the first place.
Different products had different levels of PPI, as the PPI was calculated firstly in relation to a lump sum on the length of time that the loan was taken over and the amount of money the loan was for.
The PPI would extend to no more than 5 years, but on certain types of policy, particularly those for secured loans or mortgages, this could increase to 7 years. With the premium being added to any type of facility such as, a loan on a facility of £10,000 over a 5-year period, the PPI itself would probably stand at around £2,500. In addition to this, you would of course have to pay interest on top of the £2,500 for the whole of the 5 years.
The Banks do not necessarily point that out to you of course, because if they did, you would not be interested in taking it. Indeed, it was the Banks policy to hide the PPI under the various volumes of paperwork that you signed when taking out the facility. Of course, when you took out the facility, quite frankly you were not interested in anything else, other than the fact that you had the money, so when the Bank told you that you could have the £10,000 and that you were happy to pay up to £250 per month, and they briefly said that you were paying £249.48, quite frankly you did not give a monkey!
Unfortunately, what you did not realise is that in order to get the amount of money you were paying each month to below the £250 mark, the Bank made sure that the loan facility itself was structured in such a way over a period of time to enable that amount to be achieved. One sale therefore to the Bank, with customer who is happy because they of course have the money, but unfortunately they are paying through the nose to get it, which they do not even realise.
Credit Card facilities are slightly different, in that normally the PPI was applied at the time of the sale, but also at a later date because the premium could be added at any time. Therefore, cold-callers are very good from particular Firms in order to contact clients after receiving applications from them and confirm that the facility had been uploaded. At that time, they would then suggest they take out PPI as an extremely useful cover for them. Clients normally felt that they had to take the PPI and were made to feel that they had to. Therefore, the level of finance on these telephone calls (after the event) was incredibly high. Clients were, in effect, made to feel that it would benefit them to take out the PPI for the good of the facility.
PPI was applied to most facilities and, if you had any facility whatsoever in the 1980s, 1990s and 2000s, regardless of whether you know if PPI was attached, and regardless of whatever information you have, then it is essential that you check this out.
We deal with this on a regular basis and are happy to deal with people’s concerns, such as this, on a “No Win No Fee” basis, so should no PPI be established, there is no fee at all to pay.