Could The PPI Claims Epidemic Jump Over The Atlantic?

In the UK PPI claiming is a huge market, some of the biggest banks and lenders have set aside billions of pounds worth of capital to cope with all the complaints they are likely to receive in 2012. The problems began when it became evident that lenders were selling the controversial financial policy to people who were not eligible to utilise it if needed.

What is PPI?

Payment Protection Insurance is a policy that is bought in conjunction with a credit card or loan that protects the holder against being unable to meet future repayments because of sickness, accident or unemployment. It’s a product that is widely sold around the USA and Canada but has seen little or no issues as yet, whether that is because the complaints are being protected by state so that they do not follow in the footsteps of the UK or the problem does not exist is unclear.

The problem with PPI isn’t the actual product itself, the policy does and has worked for many years to protect its holders against issues with repayments, in fact it has probably saved many people’s livelihood. The problem lies with the blatant and routine mis-selling to customers who were not eligible at the point of sale and would never be eligible to make a claim, in some cases customers were not even told that PPI was added to their account and that they were paying for it each month.

In the UK, PPI complaints stem from being mis-sold the policy for several reasons, the most common reasons are:

• The lender did not inform the customer that PPI was optional and could be purchased elsewhere.
• The lender did not inform the customer of the policy exclusions.
• The customer was told that to have PPI would improve the chances of being accepted.
• The customer was pushed into having PPI or it was added without consent.
• The customer was self-employed, retired or unemployed at the point the policy started.

This huge dilemma that the UK lenders market is facing cannot be a one off, why would banks all over the world act differently. PPI is sold in the USA for the same reasons as here in sunny England, the banks and lenders are under the same pressures and the profit margins are very similar so it leads me to wonder if the PPI epidemic that is threatening the reputation of some of the UK’s largest lenders is going to spread across the Atlantic.

As personal finance across the Atlantic is a foreign land to me I wanted your help, do you pay for payment protection insurance to cover you against sickness, unemployment or accident and can you sympathise with one of the reasons for possible mis-selling above? Leave us a comment below and check out some PPI reclaiming guides from across the pond for more information. Have a read through some of the information, although it may be slightly different in the USA and Canada the mis-selling principals will be the same so if you think you have a cause for concern then contact your bank today.

Make no mistake about it, PPI complaints are rife across the UK and with the US market being very similar and constantly selling the product how different can it be? One of the main reasons for mis-selling was due to internal pressures on sales advisors to hit target because of the huge profits available per PPI policy, surely that happens in the US, advisors cutting corners to add a policy that he/she is earning a bonus from?

About The Author

This article comes from a UK finance blogger who specialises inPPI claims within the UK.