What is Payment Protection Insurance (PPI)

What is it?

Payment Protection Insurance most commonly known as PPI is a type of insurance that can be purchased alongside credit agreements such as loans, credit cards and hire purchase. The use of PPI is for when the customer is unable to work due to unemployment , sickness or an accident that the Payment Protection Insurance will be used to cover the repayments. 


When used correctly PPI can be very beneficial in the cases where it has been correctly sold. However in many cases the Payment Protection Insurance was added without the consumers knowledge, incorrectly sold or been unsuitable for their personal needs. 


There are a number of names for PPI on your credit agreement or statement:

  • Accident, Sickness and Unemployment (ASU)

  • Card Protector

  • Loan Protection Cover 

  • Loan Repayment Insurance

  • Account Cover 

How did the lenders mis-sell PPI?

There are a number of ways in which Payment Protection Insurance can be mis-sold to customers:

  • A policy sold to a customer who already has access to a pre-existing policy such as sick pay from your employer. 

  • Some PPI was pre-loaded to finance agreements without the knowledge of the consumer

  • Some PPI was disguised buy lenders as a mandatory part of a finance agreement. Many customers believed they would not receive the credit without it.

  • Terms and conditions including medical exclusions were not disclosed by the lender, therefore some pre-existing medical conditions would not have been covered. 

  • PPI policies sold to those who would not be covered such as the retired, self-employed or students.

How was PPI paid?

There are two ways in which you would have made PPI payments on your financial agreement:

Monthly Premiums 

These type of PPI policies would have been sold alongside loans, credit cards or mortgages. Most consumers would not have been aware that the policy was added to their agreement and the fee would be taken as part of their monthly payment. 

Single Payment Premiums

These type of PPI polices are usually sold on loans or mortgages and are usually paid up-front.

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The affairs, business and property of Pentagon (UK) Limited are being managed by Stephen Katz and Paul Appleton, appointed as Joint Administrators on 13 June 2019. 

The Joint Administrators act as agents of the Company and without personal liability. Stephen Katz and Paul Appleton are authorised by the Institute of Chartered Accountants in England and Wales to act as an insolvency practitioners.

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