Paymentshield has reported that in the last two years they have received nearly 2000 letters from customers using the readily available online templates to try and seek compensation against a PPI policy.
This is despite the mortgage payment protection offered by Paymentshield not being the single premium type of protection product involved in the miss-selling scandal. All of Paymentshield’s Mortgage Payment Protection products, and the Income Insurance product, are an ongoing monthly contract, which the customer can review at any time.
In February 2012 alone, some 323 template letters were received, representing 15 letters per working day.
Tim Johnson, chief executive of Paymentshield, said:
“This highlights the confusion that exists over payment protection insurance. Unfortunately, the whole PPI miss selling scandal has left many consumers wary of taking out protection products.”
The figures from Paymentshield have indicated that consumers do not make the distinction between loan-related PPI paid for with a single premium added to the loan and products that have an ongoing monthly contract like Mortgage Payment Protection and Income Protection.
Johnson continued:
“The sad fact is that we are living uncertain economic times. With unemployment still on the rise, it’s important that people consider appropriate protection for their circumstances, should they be unable to work due to accident, sickness or unemployment - which could happen to any of us. The misconception that all protection products are bad products could increase the huge protection gap and clearly people are confused.”
Last year Paymentshield paid out over £20 million in claims to people needing the financial support of their Mortgage PaymentProtection or Income Protection policy.
“New rules from the Competition Commission which come into effect from the 2nd of April are designed to provide customers with additional peace of mind that they will not be pushed into taking out products that they don’t want or don’t need.
"Existing customers with protection products will also start to receive annual statements over the next year which should encourage them to more regularly speak to their insurancebroker or financial adviser to help find them review their protection policies against their current circumstances.”
