Reclaim PPI On Secured Loans
Secured loans were all the rage back in late 90’s and early early 2000’s. it was big business, big loans, big interest rates and not least of of big PPI premiums.
If you you think you paid PPI on a secured loan, then there is a significant chance that you may have been mis-sold PPI on the borrowing. The premiums were often huge and when added to the initial loan, it meant that the trust cost of the cover over the loan term was colossal.
It was a huge market. With the FSA estimating that in 2006, it was worth of around £7 billion. Here are just some of the providers from way back in the day, that you might remember – Southern Pacific, London & Scottish, Kensington, Paragon and of course the biggest and best known of them all, First Plus. Between 2008 and 2009 due to the financial crisis, secured loan lending fell by close to 90%.
So what was a secured loan and why were they so bad far your financial wealth? Well, the vast majority were taken up by people with poor credit records who were attracted to the promise of all their borrowing being bundled up into one “affordable” monthly payment. Loans were secured on the borrowers’ property by means of a “second charge.” It was even possible to borrow more than 100% of the property value.
Although maybe seen as curing debt problems, consumers were seen as easy prey for unscrupulous brokers, who normally worked with a panel of secured loans providers. Arrangement fees were often excessive, as were the interest rates and it was entirely normal to lump huge PPI premiums on the borrowing right from the outset. The PPI cover was generally limited to the first five years of the borrowing, despite the loan term consistently being much more than that. Try and repay the borrowing early and the bad news just kept coming, with a 6 months redemption penalty being the norm.
If repaid in full within the first five years, PPI rebates were also often a mere fraction of the premium paid, simply due to the massive commissions payable and split between the broker and the loan carrier. In fact as much as an astonishing 90%.
Claiming for mis-sold PPI on secured loans can be tricky and it’s absolutely vital in our opinion, that before you start, you recover ALL your paperwork from the lender where ever possible. The sales process was often much much complex than a simple personal loan and with the premiums, charges and interest rates, potentially any claims for mis-sold PPI could be substantial. That’s why at Beat the Banks, we don’t take chances. Unlike the rest, we are not happy to settle with the merest amount of Account information from the lender or broker. That will tell you nothing about how their sales process was applied.
If you think you might have been mis-sold PPI on a secured loan, you can contact the Beat the Banks team on 01382 200474, or for free on 0800 193 1234.