Payment Protection Insurance - Mortgage compensation

PPI misselling facts and figures

We have done some research into payment protection insurance (PPI) and the impact financially it has on the consumer, the table below displays some of the more major players in the credit industry and gives an example of some of their payment protection exclusions and terms. You can see that if you had to stop work due to a bad back with Capital One you would be excluded from making a successful claim on your PPI.

  1. Payment protection insurance has grown into a major industry, with 20 million policies in existence in the UK and about seven million new ones sold each year.
  2. Total premiums have grown by an average of 18.8 per cent a year for the past five years and were about £5.5 billion last year.
  3. A borrower taking out PPI on top of a loan typically adds 13 to 56 per cent to the total cost of the finance.
  4. Each year over 450,000 consumers make claims on PPI policies - according to Citizens Advice Bureau research, 85% of claims are unsuccessful, in stark contrast to industry claims that the figure is only 15%.
Company
Bad backs
Mental Health
Self Employed
Fixed Term Contact
Pre-Existing Conditions
Age
Barclaycard Not excluded Not excluded Only if business wound
up		 Depends on
contract length		 Two years, unless
claim for bad back
or mental health
where the period is
five years.		 Up to 65 for accident,
sickness or unemployment
claims but up to 70 for
hospitalisation
Citi Bank credit card Not excluded Not excluded Bankruptcy, liquidation or official termination of self employed status due to failure of business Depends on
contract length		 12 months Up to 65
Capital One Excluded Only for
psychosis		 Only if business has
failed		 Excluded 12 months People aged 65 or over or who have retired are
only covered for accidents or accidental death
Mint Only if MRI
scan shows
abnormality		 Not excluded Only if business has
failed		 Depends on
contract length		 12 months Up to 65
Bank of Scotland unsecured loan Benefit paid for
reduced period
Excluded
Excluded
Depends on contract length
12 months
Up to 65
Lloyds TSB credit card
Not excluded
Not excluded
If business has
involuntarily ceased
trading
Depends on contract length
12 months
Up to 65 for ASU, 65-75 for hospitalisation
benefit
HSBC personal loan
Not excluded
Not excluded
 If business has
involuntarily ceased
trading
Depends on contract length. If contract ends early may pay until end of contract
12 months
Up to 65
MBNA credit card
Only if
radiological
evidence
Only if receiving
treatment from
consultant
If business has ceased to trade due to inability to pay debts when due
Depends on
contract length
Excluded
Up to 65 for ASU
claims but up to
70 for
hospitalisation

The information in the table was gathered from the Citizens Advice Bureau.