Reclaim PPI On Mortgages
There was a significant move away from renting a home to buying a property instead in the 1980s. We were encouraged to think of ourselves as home owners, as having our own little corner of the world to call ours. Mortgages were relatively affordable, especially when compared to paying rent on a house or flat that you would never get to own outright.
The banks and building societies were happy to encourage the lending, but for them the margins on a mortgage weren’t overly high. There was profit to be made, of course, but it was more of a steady trickle than a powerful waterfall. They needed something else to augment their income, and that something else turned out to be Payment Protection Insurance, otherwise known as Accident, Sickness and Unemployment Cover.
Sales teams in our financial institutions often used extremely aggressive tactics to encourage customers to sign up to PPI, and most people agreed to do so, wrongly thinking it was the right thing to do. Policies offered by just about all of our banks and building societies were usually far more expensive than those that could have been purchased elsewhere, and in many cases the cover itself was of little or no use anyway.
Even the most trusted sales teams were hardly likely to tell you that PPI was cheaper elsewhere, and we had always trusted our high street banks in the past so why shouldn’t we trust them to do the right thing? The truth is that as the lending boom continued, the drive for profits overtook any feelings of customer loyalty that we’d enjoyed in the past. From then on, it was pretty much all about making money.
One of the reasons the banks and building societies loved PPI so much was the fact that it was so easy to sell. It played on the customers’ basic need to feel protected when taking out a major financial commitment, so there wasn’t usually much in the way of persuasion needed. And it was sold as a one size fits all product, so that meant expensive training courses for sales teams were not necessary.