What to do if you were mis-sold PPI

The Financial Services Authority has brought in strict rules about the selling of payment protection insurance (PPI) and now the British Banking Association’s decision to drop its legal battle over PPI is a long overdue triumph of common sense. But what is PPI and what does this latest move mean for you?

The British Banking Association's (BBA) decision to drop its legal battle over payment protection insurance (PPI) is a long overdue triumph of common sense. But what is PPI and what does this latest move mean for you?

PPI started being offered in the 1990s as an insurance policy on mortgages, loans and credit cards it would cover people's repayments if their income fell due to illness or unemployment. However, once the banks discovered how profitable PPI was in 2004 The Guardian revealed that many banks were returning just 15% of their PPI income to claimants they started to push it more and more. This cash cow was eventually targeted by the regulators who spotted four problems with it.

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