We’ll be honest with you: not all payment protection insurance plans were bad. Some people knew what they were getting into when they signed up for it, and you can still find PPI plans being sold online to this very day. Unfortunately, they are still a bad deal for consumers even if you knew of them when you signed up for them. You might feel that you have to keep the policy if you bought it, but that’s not the case at all. If you’re just finding out about PPI and you started the policy, you can cancel it within the first 14 days of the policy’s life. You might need to check the terms and conditions for this, but most policies have this cooling off period. If you’re not sure about it, you can back out with usually no penalties at all.
Cancelling your policy beyond this period is a little more difficult, but not really. It all starts with knowing what type of PPI you’re working with.
Monthly PPI has to be the easier one to tackle. All you have to do is make sure that you cancel your policy whenever it’s convenient for you. That’s right — with a monthly policy that’s attached to a store card, you can cancel at any time you would like without having more costs. Be sure that you cancel the direct debit authorization as well.
A single premium policy is a little different, but it’s still able to be cancelled. The single premium refers back to the amount that you’ve paid upfront for PPI to cover you on a finance agreement.
The Financial Services Authority has begun making changes to PPI, but it’s still time to get out of the policy if you find that it’s not serving you at all. The refund process isn’t as straightforward as we would like — the lender can still charge you a “reasonable amount” based on their own processing fees. You also can’t just get a straight refund back — PPI is seen as something that’s more expensive when it would be needed most. That is to say that it would be the most costly at the start of the plan, and go down over time. So lenders will indeed calculate this before they process a refund for you.
Other lenders may flat out refuse. You can point the lender to the FSA’s official stance on the matter and see if they budge any. If they don’t, then you will have to bring your complaint to the Financial Ombudsman Service.
Standing up for yourself might sound tiring, but it’s your financial life and it’s your hard earned money that’s going into this. Choose where you move next carefully, because you might not get a chance to do it all over again. Good luck!