An End to "nil Refund Terms" for Financial Consumers

By: Gary Parsons ">

The Financial Services Authority (FSA) has agreed measures with PPI industry representatives to end "nil refund terms" for those who have taken out single premium policies with their financial products.

The FSA has also introduced measures to ensure "fairness" and "transparency" in future consumer policies and that they should offer a fair settlement to those wishing to cancel their payment protection insurance (PPI).

More than seven million PPI policies are sold each year, most commonly when taking out personal loans and mortgages, providing cover for policyholders who are unable to keep up with their bills and are likely to miss payments due to poor health or redundancy.

The price of this insurance can often increase the loan amount by around 25%, when taken with some of the most expensive providers. This can mean that typical loans of ?5,995 can often increase to just under ?7,500.

Many experts believe that this is a considerably high amount and you should definitely try reclaiming this cost. If you feel that you have been miss-sold the cover or it wasn't explained to you correctly at the time of sale then you may be able to claim it back.

You will need to write to your lender asking for the costs, as well as any interest incurred to be refunded. They must then reply back to you within eight weeks, otherwise you should take your case to the Financial Ombudsman.

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