Payment Protection Insurance (PPI) is intended to cover your repayments on a loan or credit card if you are unable to make payments yourself due to accident or illness or being made redundant.

There are 24 million PPI policies in force and 7 million new ones are sold every year.

In theory it is a good idea to make sure your debt repayments will continue if you are faced with the sudden loss of your income. Banks and loan companies use frightening statistics to reinforce the message that you just never know what’s around the corner and it’s therefore sensible to have suitable insurance in place.

The problem is that PPI is virtually useless for most people. Only a fraction of those to whom it is sold make a claim each year, the rejection rate is high, and the cost of it often outweighs any benefit that might be paid. In short, PPI is a money-making tool for the banks and credit card companies – they are the great beneficiaries of these policies, not the policyholders.

In fact, PPI is so profitable that many firms insisted PPI be taken out with a loan. The repayment quotation often automatically included the cost of PPI, giving the deliberate (but false) impression that PPI was a condition of the loan. In truth, a customer was legally entitled to choose not to take the PPI element of the package.

This example highlights the profitability to the financial services industry of selling PPI alongside a loan. A typical £10,000 loan to be repaid over 5 years will cost £11,900 in total. If PPI is included the cost to the consumer of the total repayments (loan plus interest plus PPI premiums) rockets to £14,950. In the vast majority of cases the difference of £3,050 represents pure profit to the policy seller. With 7 million new policies being sold annually, the profits from selling PPI are astronomically high.

Such profitable business nearly always results in mis-selling; i.e. the sale of a policy to someone to whom it is unsuited.

If you have been paying for PPI with a loan or credit card and you think you might have been mis-sold then please get in touch so I can get your PPI premiums back for you, along with any extra interest you paid (as in the example above). I will also get interest added to your refund as you have been deprived of money (the premiums) that you could have used for another purpose.

If you have already cancelled your PPI policy, or repaid the loan it was attached to, then don't worry. All may not be lost and I may still be able to get a refund for you.

Please go to the Claim Now page to take the first step to getting your money back (with interest!)