IT could be described as daylight robbery and it might involve one in four of the people who live in the Borough of Swindon.

So why do we hand over money for useless insurance policies which we will hardly ever use?

Today we look at what's going on and how one man is trying to get our money back for us.

Payment Protection Insurance (PPI) policies are allegedly designed to cover the cost of loan or credit card repayments in the event that the customer is off sick from work or has become unemployed.

The main problems with PPI are that many people don't really need the policy they have, the numerous exclusions on the policy mean they may not be able to claim at all and that the benefit is restricted to a set period of time, usually 12 months.

A Swindon financial company, Renaissance, is trying to get money back for customers who should really have not been sold the policies. The MD is Andy Humphries, and it was Renaissance who took on the banks and beat them when they overcharged customers interest.

He was the Swindon Advertiser and Marriott Hotel Business Person of the Year and now he's after the companies selling these polices.

"Many customers did not even know they were being sold the policy or thought they had to have it to get the loan or credit card," said Andy.

"In 2005 the Citizens Advice Bureau estimated there were 20 million policies with about seven million new policies being sold each year.

"That means on average, each household in the country has one of these policies and based on these numbers, Renaissance estimate that as many as 50,000 people in the Swindon area could be affected."

Andy said in their report the CAB identified what they said to be widespread mis-selling and consumers paying over the odds for the policies - with only 15 per cent to 20 per cent ever making a claim under the policy.

"Little wonder they called their report Protection Racket," said Andy.

"About 60 per cent of PPI policies are related to personal loans and most were sold by the high street banks and building societies.

"It would not be uncommon for the premium on a five-year loan of say £10,000 to be more than £2,500 and for the commission the banks earned on this to be £1,500 (source - Office of Fair Trading).

"As the PPI was added to the loan, the banks would earn interest on this as well. That would take the total cost to £3,000 or more.

"Even if someone was unfortunate enough to need to make a complaint but fortunate enough to escape the exclusions on the policy then the cover would typically only cover the loan repayments for a year.

"If they claimed for a full year, the repayments may well be less than the total cost of the policy."

'Awareness is the best policy'
Andy said if people really had understood that the costs relative to the restrictive benefits, very few, if any at all, would have taken the PPI.

"With bank staff being set targets for selling PPI alongside loans it is little wonder that many people were hurried into taking it up, under the impression they had to buy the policy or left with the impression that taking out PPI would improve their chance of getting the loan.

"If a customer had shopped around for a policy they could have found cover at a fraction of the price.

"If the policy was not fully explained before purchase, it is possible the policy was mis-sold.

"In particular if the sales person did not fully explain the costs and benefits or make sure the policy was right for the customer.

"The Financial Services Authority has, on several occasions over the last few years, expressed concerns over Payment Protection Insurance.

"In September last year, they announced the results of its latest mystery shopping exercise.

"Despite previous warnings a large number of lenders continue to fail to meet the FSA's selling standards.

"It is likely that some major institutions will soon receive large fines but in the meantime customers continue to be penalised."

Andy said the latest scandal could dwarf the bank charge fiasco and be of a similar scale to the endowment crisis. "Awareness of the issue is growing fast.

"At Renaissance, we are getting hundreds of enquiries each week from people who have Payment Protection Insurance.

"We have won 90 per cent of the cases we have taken on and the average amount of compensation we have secured is more than £2,000."

For a free assessment please call 0800 612 0000.

10:12am Monday 10th March 2008

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