Payment Protection Insurance - billions of pounds in
compensation due to Freelancers
The High Court has ruled that the British Bankers Association
(BBA) is to pay compensation to customers who have been mis-sold
Payment Protection Insurance (PPI).
It all began over a year ago when it became clear that banks
were not selling PPI correctly to Freelancers and the
self-employed. PPI is supposed to cover the costs of loans
should your income fall due to illness or losing your job.
Many individuals have already received compensation after mis-sold
to and finding out that there policy did not cover them.
In many cases, for this type of protection, the small print
states that you would need to be in full time employment in order
for the policy to react. Banks have been selling PPI with
loans and credit cards now for many many years and despite knowing
full well of the small print exclusions, freelancers and
self-employed individuals have still been purchasing the insurance,
which of course have not been worth the paper they were written on
- the policies would never have reacted in their situation.
This has left many people extremely angry and in December 2010,
the FSA ruled that banks should be going back through all previous
sales of PPI with a view to putting it right. It has been
estimated that this could result in a pay out of over £4
billion. The BBA were (not surprisingly) reluctant to comply
and have said that they feel the FSA are acting unfairly when they
are in effect asking for new rules to be backdated. A High
Court ruling on the 20th April has now forced banks to
go through with the compensation task and contact all customers
affected.
If you currently have a Payment Protection policy in place,
check the small print and if you too find that the policy doesn't
cover you, contact your bank asap and make a claim for
compensation. Also, it is important to remember that
for all the time you've been working with peace of mind believing
that you're fully protected, you haven't been and you're not
protected now so do your research and get yourself covered asap but
please read the small print!