What is PPI?
PPI is a term which stands for Payment Protection Insurance that is a type of insurance sold by the banks alongside credits. It is basically a sum of money that the bank offers the client in order for him to keep paying for the credit loan if he gets sick or if he loses his job. The PPI is supposed to help the bank clients to overcome financial or health issues during the period in which they have taken the credit loan. However, not many people are aware about this term, thus the result of many not actually claiming their PPI back.
Why did the PPI scandal begin?
In the beginning, people did not know much about Payment Protection Insurance, which is why they did not ask for it when loaning a credit, when taking a new mortgage or when making a new credit card. Once they started understanding that they could take the PPI back as an actual sum of money, the bank customers began hiring companies to do the work needed in order to refund this amount. The problem was that the bank had given this policy to people that did not qualify for it such as pensioners or self employed people, who therefore could not lose their job since they did not have one. Since the banks charged them for the Payment Protection Insurance, more and more people got angry and the banks were forced to give back all the money they demanded from their own customers. Some banks collapsed and had to save billions of dollars to be able to pay this massive debt to all of the customers.
Do banks still offer PPI on loans?
Yes, banks still offer Payment Protection Insurance to all of their customers that qualify for this particular insurance. This means that they are not pensioners or self employed, among other factors. This type of insurance is designed to help people and it usually comes with any type of credit loan. Customers can buy PPI from a different insurance company aside from the one that offers them the loan. Before getting a Payment Protection Insurance however, you have to really think whether you need it or not, because otherwise you might buy it for nothing. In the end, this insurance is designed to help you pay the credit loan in the event that you might face unforeseen consequences.