How was it Mis-sold?

The most common form of mis-selling is where the PPI is made a condition of obtaining the loan i.e. a borrower is told that they cannot have the loan without the PPI. PPI is entirely optional and should have no influence on whether or not you get the loan. This is a classic example of banks and brokers using what the FSA refer to as 'point of sale advantage' they are aware of the borrower's real need to have the loan and wait until the very last minute before seeking to foist an insurance policy that was never requested (nor ever wanted) in the first place, onto a borrower who is not entirely sure what it is, yet is told they have to have it. In addition to this, banks and brokers also often fail to ask key information from a borrower before seeking to sell PPI, which often results in it being virtually useless. Such key information can include:

• whether the borrower is in fact employed at the time of the loan agreement - you would be surprised how many housewives and those who are retired have been told they need to take out PPI
• whether the borrower already receives benefits such as sick pay from their existing employment, which would mean they could continue making repayments even if they were off work due to being sick or having an accident, for a period of time.
• whether the borrower had ever suffered from a pre-existing medical condition. Should the borrower suffer from this after taking out a PPI policy, the chances are they will not be able to claim, based upon the fact they have suffered from it beforehand.
• whether the borrower felt they had good job security in their job at that time and as such, did not think redundancy was imminent.

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