Payment Protection Insurance (PPI) Glossary

Balance Transfer: The process of taking a credit product’s balance and transferring it to another credit card, store card, or traditional bank loan, generally to reduce the interest rate and enjoy more favourable repayment terms.

Bank: A major financial institution or lender responsible for granting home mortgage loans, personal loans, credit and debit products, and traditional bank accounts for depository uses. Typically referred to as a “High Street” institution.

Bank Statement: A monthly summary of credits, debits, and other obligations incurred during the prior thirty days, mailed or electronically transmitted directly to the bank’s customers.

Bankruptcy: This formal insolvency procedure is one that seeks to nullify and remove all debts owed to all creditors due to a financial hardship that simply cannot be overcome through any other means. If successful, all debts are discharged and the credits can no longer seek repayment from the creditor for any reason.

Broker: A third party that manages and arranges financial products, investment instruments, or liability policies on behalf of a customer that typically pays a small fee for the convenience of the service.

Callback: The call received by consumers when a bank has made a decision to either accept or reject their request for a banking product or load offer.

Car Finance: This type of lending instrument is based on the value of a consumer’s vehicle. That car is used as securitisation, or collateral, and serves to determine just how much money a lender will grant to a customer. If the loan is not satisfactorily repaid, the vehicle can be repossessed to cover the bank’s loan amount and any relevant expenses as part of that loan.

CCJ: An acronym that stands for “Country Court Judgement,” typically issued against those debtors who have not made every attempt to fully satisfy their financial obligations.
Country Court Judgement

Claim: A financial action that involves one party suing the other for the failure to pay a financial obligation. This is typically undertaken by banks and lenders, as well as landlords and others with an unpaid financial claim or stake.

Claims Pack: A payment protection insurance pack is a slate of information with customer details and information needed to take any action or file any claim permissible within the terms of the PPI policy.

Courier: This individual is part of a larger payment protection insurance team that will hand deliver all relevant paperwork and forms necessary for filing a claim or taking other actions. Strict confidentiality is required of couriers and policyholders during this process.

Credit Card Number: A 16-digit number that identifies the credit card, the account holder, and the available balance on the card, when used at retail outlets and financial institutions. Typically placed on the centre of the card’s front, stored in the magnetic strip on the back, and optionally stored in a contactless communications chip for wireless transactions.

Credit Card Statement: A monthly statement of all transactions associated with a single credit card account. The statement will include all credit charges to the account as well as all payments, and will include an explanation of the APR and how it was applied to the statement balance. Credit card statements typically come with a required payment date if a balance is due.

Credit Care: This type of payment protection insurance applies to many credit card accounts under limited circumstances.

Credit Care Insurance (CCI): Credit care insurance is a type of payment protection insurance that covers monthly minimum payments due to the lender if an account holder becomes injured, ill, or unemployed. Specific terms are negotiated at the time a payment protection insurance policy is obtained by the consumer.

Debt Management: This program is designed to aid consumers in their quest to gain control over their credit accounts, loans, and other obligations. Most debt programmes seek to consolidate debts, obtain lower interest rates, and lower monthly payments for consumers so that they do not fall behind on their monthly payments or other financial obligations.

Default: A seriously late payment, defined by most financial institutions and lenders as being at least 30 days past the date when it was due. A series of payments in default can spell real trouble for consumers.

Direct Debit: The process by which a consumer’s bank account is directly assessed a monthly minimum payment, or a full payment, of a financial obligation. Direct debit is most often used to repay loans and credit cards with a monthly minimum amount. It is also used by utility and communications companies for the full repayment of an outstanding monthly balance automatically.

Employment Status: A simple statement regarding the nature of one’s occupation and employment, including descriptions such as self-employed, employed full-time, employed part-time, disabled, retired, unemployed, full-time student, and part-time student.

Finance Agreement End Date: The date on which a financial agreement, such as that concerning a mortgage or loan, will end and require either renewal or suspension.

Finance Agreement Start Date: The date on which a financial agreement commences, typically used to calculate interest rates and fees due to a lending institution for one of their products.

FOS: An acronym that stands for the “Financial Ombudsman Service.”

FSA: An acronym that stands fro the Financial Services Authority, the key regulatory body of financial and lending activity in the United Kingdom.

GISC: This acronym refers to the once-important General Insurance Standards Council. The council has long been defunct, however, and this acronym is rare in daily usage.

IFA: An acronym that stands for “Independent Financial Advisor,” used most often for those consumers who are engaging in complex investment products and lending services that require special care and attention.

Income Protection Insurance (IPI): A type of payment protection insurance designed to protect monthly income in the event of injury, illness, or unemployment.

IVA: This acronym stands for “Individual Voluntary Arrangement.”

Letter of Authority: A letter that grants a given party the right to access personal information about an individual.

Letter of Engagement: This letter gives a party the right to represent an individual in a court of law, or for other legal reasons. Letter granting a party the right to represent you in a legal capacity

Life, Accident, Sickness, and Redundancy Insurance (LASRI): This type of payment protection insurance is designed to protect against illness and accidents, maintaining a consumer’s financial status during each.

Life, Accident, Sickness, and Unemployment Insurance (LASU): Similar to LARSI payment protection insurance, this method covers unemployment that may result from certain conditions.

Loan Agreement Number: This unique number identifies an individual to their financial institution or lender, and appears atop virtually all paperwork and account statements related to a customer’s account. It can often be the same 16-digit number that is found on credit or debt cards, or another unique number chosen at the time an account was opened. Banks can supply this number if it is lost or forgotten, though many will charge a fee for doing so.

Loan Protection Insurance (LPI): This type of payment protection insurance protects loans against financial hardship and an inability to pay.

Monthly Premium: The minimum monthly payment due to maintain payment protection insurance coverage.

Mortgage Broker: An individual who acts on behalf of a mortgage lender to broker a deal and negotiate terms with consumers.

Mortgage Payment Insurance (MPI): This type of payment protection insurance covers mortgage payments during financial hardships.

Mortgage Payment Protection Insurance (MPPI): This type of PPI covers mortgage payments during unemployment, illness, and other events.

Online Claim Assessment: An online tool used to assess the validity of a payment protection insurance claim and instruct individuals how to proceed when filing one.

P

Potential Claims Value: The estimate of a claim’s value when payment protection insurance must be invoked due to illness, injury, accident, or unemployment.

PPI Compensation Assessment Questionnaire: This form is used to determine whether a customer was erroneously sold payment protection insurance.

Premium Protection Insurance (PPI): Covers the payment of certain insurance premiums during financial hardship.

Premiums: The annual amount paid each year to maintain the active status of payment protection insurance or other insurance policy.

SAR: This acronym stands for “Subject Access Request.”

Single Premium: A single, up-front premium charged for an insurance product. Typically, this is an annual payment.

Store Card Finance Account Number: Refers to a store credit card or loan, and the individual account number that identifies it.