Over the past year unemployment levels in the UK have been soaring, as on ongoing recession wreaks havoc throughout the economy and industry. Thousands of people have lost their jobs, as firms cut back or go bust, and for many of those that have debts such as loans, credit cards, and mortgages this has meant putting in a claim on their Payment Protection Insurance Policy so that their repayment are covered whilst they try and get back on their feet.

Payment Protection Insurance has received a lot of negative press over the past couple of years, and this is for a number of reasons. Single premium PPI, which can no longer be sold by lenders alongside credit agreements, was under fire because it was a type of cover which was paid for in a lump sum, and this lump sum was added to the finance, which effectively meant that the borrower was paying interest on the cost of the cover as well as on the loan.

The other reason for the controversy over PPI was that over recent years it has been massively mis-sold, and an alarming number of consumers have been sold these policies even though they are not even eligible to make a claim on the cover, such as self employed workers. The purpose of PPI is to cover specified debt or mortgage repayments for a set period of time in the event of sickness, accidents, or redundancy, but in the current climate, with unemployment rising, some policyholders are struggling to get their insurers to payout.

Many people have been forced to put in a claim after being made redundant over recent months. However, it has been reported that many banks are doing their best to get out of making a payout on the policies, which, in many cases, is leaving the policyholder struggling to keep hold of their homes. It is claimed that around one in six claims is being dismissed by banks due to petty clauses in the small print, and in some cases the reason for dismissal of the claim is that the policy had been mis-sold to the consumer in the first place.