Sales of the Barclays Overdraft PPI (Payment Protection Insurance) has been widespread over the last ten years. Barclays often sold Overdraft PPI on the basis that if they were to offer you an Overdraft, let you extend your Overdraft limit or continue with an existing Overdraft it was important that you took out Barclays Overdraft PPI.
However, Barclays borrowers with Overdrafts were entitled to be provided with the same amount of information and choice as Loan, Credit Card and Mortgage borrowers, in respect of the PPI. However, this often did not take place.
If sold correctly, Barclays Overdraft PPI will ensure that your interest payments on your Overdraft are met if you are unable to work. But, all too often, the insurance was mis-sold to people who did not want it, didn't need it or could never have made a successful claim on it.
Overdraft PPI was mis-sold on an industrial scale by Banks, including Barclays Bank for some time. In fact, the sheer scale of the whole episode has made PPI mis-selling the biggest scandal in UK financial history.
PPI on Overdrafts is calculated differently to that on Loans or Mortgages, which often used a fixed premium which cost the same each month.
However, Overdraft PPI is based on the residual balance on your Overdraft each month. A case study from the Financial Ombudsman Service (FOS) found that the insurance cost 79p per month for every £100 outstanding at the end of each month. So, if you in the habit of keeping a relatively high Overdraft balance for a period of several months, you will pay a correspondingly high amount of PPI each month.
If your Barclays PPI claim is successful, Barclays must repay all of the PPI premiums you paid from the start of the agreement, plus 8% interest for each year you had PPI.
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