According to the Citizens Advice Bureau and the Trading Standards Office millions of Payment Protection Insurance Policies taken out on Secured Loans, Unsecured Loans, Mortgages, Store and Credit Cards were mis-sold. Thousands discovered they had been mis-sold these policies – often taken out for peace of mind in case of illness or unemployment – when they became ill or unemployed and found that the insurance they had been paying in case of just such an event was worthless. To make matters worse for some of these people – the same financial institutions that had mis-sold them a variety of PPI policies – hounded them for full payment of the loans when they were ill or without work and unable to pay.

Thousands Unaware of Massive Refunds Due to Them – The Continuing Scandal of Mis-Sold Payment Protection Insurance (PPI)

One person we spoke to said she felt almost suicidal when she succumbed to a serious illness and was no longer able to make payments on a £5000 unsecured loan. The loan was taken out with a High Street bank.

“I was threatened with court proceedings to recover what I owed and bailiffs even turned up at my home. They were always phoning me too – that really got me down. When you are ill, matters like this are doubly difficult to deal with. The calls were very unfriendly and distressing – one man in particular was very intimidating. I ended up paying them with what little money I had – in instalments in an effort to offset the accruing interest and in the process was falling behind with rent payments, utilities and council tax. I explained this to them, also that I was ill and a single parent and I told them that I had been paying over £40 per month for the last two years in Payment Protection Insurance to cover this eventuality. They ignored me and said that the PPI issue was nothing to do with them.”

The woman, who does not wish to be named only managed to avoid complete financial disaster because she contacted a debt management company (DCM). They dealt with her debtors and arranged for all interest to be frozen. They also explained that keeping up with payments of rent, utilities bills and council tax was essential and that other debts (e.g. credit cards and loans) were unessential. She had to pay the DMC about £20 per month on top of the £100 a month per month which they to pay towards the loan and other debts – but this was opposed to attempting to pay more than £600 per month. When she regained her health she was able to take over the paying of the debts direct with the companies that the bank had sold her debt to. She told us:

“If it wasn’t for friends and family I wouldn’t have survived and my children would definitely have suffered – I can’t believe that I paid almost £1000 to the bank to avoid the situation I found myself in anyway – now it turns out that I was undoubtedly mis-sold the Payment Protection Insurance and they should pay it back. Better still, there are many solicitors’ offices offering a No Win No Fee service to get back my money”.

At a time when many are experiencing financial hardship it is scandalous that thousands of them are unaware that they have valid claims outstanding and could recoup £thousands. Tell everybody you know about this.

Added 10th February 2009

News over the weekend concerned the plight of our "poor banks"! Because they are no longer able to make huge, unethical profits by flogging us worthless but expensive PPI they are having to put up the APR on dredit cards and massively increase related charges. This is despite the base rate being cut to its lowest level ever. The average rate on credit cards had risen to 17.7% when we added this.