HBOS payment protection insurance (PPI), also known as loan repayment insurance, credit insurance or credit protection insurance was designed so that the borrower could make repayments to HBOS if they were unable to earn income to service the debt. This shouldn't be confused with income protection insurance which is not usually attached to a debt. PPI was widely sold by HBOS as an add-on to the loan or an overdraft product.
HBOS PPI usually covered payments for a minimum of 12 months, this gave the borrower enough time to find alternative means of making repayments such as going back to work.
Some HBOS PPI policies were sold without the consumer even aware that PPI was added onto their loan. Some consumers claim that HBOS informed them that their application for a loan, credit card or mortgage would be declined if they didn't take out HBOS payment protection insurance. In some cases this led to fear of losing a loan and the borrower would accept the HBOS PPI even though they may not of even needed it.
HBOS may have mis-sold you PPI if any of the below statements are relevant to you at the point of sale:
- Were you led to believe that the HBOS PPI policy was compulsory to your finance agreement?
- If a PPI policy was required for the finance agreement, HBOS should have made you aware that you had the right to shop around OR if you had pre-existing cover elsewhere, HBOS should not have sold you another PPI policy.
- Did HBOS enquire if you had PPI cover elsewhere that would of covered repayments?
- HBOS should have asked if you had pre-existing PPI cover elsewhere as this would have been sufficient.
- Were you older than the upper age limit for your HBOS PPI policy?
- If HBOS had an upper age limit on the PPI policy and you were above this set age, you would not have been covered.
- Was the term of your HBOS PPI cover shorter than the term of the finance agreement AND did HBOS not explain that there would be a period of no PPI cover towards the end of your finance agreement?
- If HBOS did not explain that you would be unprotected for any period of time throughout the finance agreement, you have been mis-sold your HBOS PPI policy.
- Did HBOS make you aware of any exclusions or circumstances in which you would not be eligible to make a claim?
- If you weren’t told by HBOS about the exclusions, or circumstances in which you couldn’t claim, you may have been mis-sold your HBOS PPI policy.
- Did HBOS make you aware that part of your PPI premiums may have been paid as commission?
- The Plevin ruling means that if over 50% of your PPI premiums were paid in commission to HBOS, you were mis-sold and are due a PPI refund.
- Did you feel pressured into purchasing the HBOS PPI policy?
- A simple assessment of your personal circumstances to determine if PPI was of any benefit to you should have been carried out by HBOS, with no pressure or hard selling.
- Did HBOS make you aware about cancelling your PPI policy?
- You should have been made aware by HBOS that you had the right to cancel your PPI policy within the cooling off period.
- Were you aware that HBOS had added PPI to your agreement?
- If you were not aware PPI had been added to your agreement by HBOS, it may have been added without your consent or it may have been opt-out box which was not obvious.
- Did you have a pre-existing medical condition at time you were sold your PPI policy by HBOS?
- If you were ever unable to work throughout the term of your HBOS PPI policy due to the pre-existing medical condition, you would not have been covered by the HBOS PPI policy.
- When you were sold your PPI policy by HBOS, were you unemployed, self-employed or retired?
- If you were unemployed, self-employed or retired when HBOS sold you your PPI policy, you would not have been covered and therefore the HBOS PPI policy would have been of no benefit to you.
- Was the total cost of the HBOS PPI policy clearly explained to you at the point of sale?
- HBOS should have explained every aspect of any costs relating to your PPI agreement. Failure to do so would be considered a big mis-selling factor.
If you have a successful PPI complaint against HBOS upheld, you would be entitled to a full refund PPI paid to HBOS, a full refund of any interest charged on the PPI by HBOS and a compensation interest of 8% per annum on both of those combined.