Payment Protection Scam- An Evil

Payment protection plans have become very popular these days. This upheaval has also led to increase in payment protection scam. Payment protection scam is actually a condition when some one is sold a payment protection plan without giving proper information about it. This is also known as mis sold payment protection insurance.

The scam actually starts when the unsuspecting person is registered under the protection plan, without his/her consent. The service is then charged for every month and the charge is included in that person's monthly statement. Sometimes, the innocent people keep paying for it, without realizing what it actually is.

It sounds like a very small scam, but a calculation by the Citizens Advise Bureau states that due to a payment protection scam, the monthly cost of a normal person rises by almost 20 percent. On top of that the company providing insurance gets to earn \'a35 billion extra, every year.

Sometimes the scam is committed via some other way. The people are given false assurances that the protection will help them in all type of financial difficulties. In reality, there are many conditions that can make a person ineligible for the claim.

According to a survey, more than 85 percent people are not able to claim their payment protection insurance. This is because they do not qualify for it. Another thing which the people doing these scams make use of is a loophole in the law. Well, it is legal to make someone sign up for a payment protection as an inherent condition. But, he/she should be informed that the cost is included in the APR and this is what the people conducting these scams skip.

The people are not told that there is some restriction on the number of working hours. They are not even given out the proper terms and conditions.

People who work on a short term contract or run a business are not eligible for this payment protection. This is where the real catch lies. The people running these scams do not inform the customers about this condition. Therefore, even after paying the whole fee, there claim is denied afterwards.

In some cases, people do get the benefits of the cover but then it is up to the insurer. Sometimes, the people who suffer from an illness are sold a payment protection. After that if they ask for a claim then it is denied. This is because they are not covered. Actually, the terms and conditions of the policies clearly state that pre existing illness is not covered.

Well, payment protection scam is an evil that is harming a large number of people everyday. The only way one can avoid them is by being smart.