Previously, instead of selling PPI policies under which the consumer pays a monthly fee for PPI cover, many loan providers would sell a type of PPI policy known as a “single payment PPI policy” or a “front loaded PPI policy”. This involved calculating one large premium, often thousands of pounds, which was to be paid in advance for the policy, and adding this to the total loan amount.
This was often extremely bad value for the consumer because the PPI element of the loan accrued interest which was added to the outstanding debt and, over the lifetime of the loan, the consumer might pay double or even triple the original PPI premium in additional interest. Because of this, salespeople would often try to persuade consumers to take out these types of policy even if they were completely unsuitable.
If our clients have ever had a loan of any type, either from a bank or building society or as part of a care finance package, they may have a PPI claim. Even if they do not think that they were sold PPI, they should still investigate further because tens of thousands of people have had PPI added to their loans by commission-hungry salespeople without their knowledge.