Here is a matter that could affect many expats where it hurts – in the pocket! However, I should preface the subject by declaring an interest in this, a close family member having had direct experience of the problem.
The subject is payment protection insurance (PPI), as applied to credit cards, and potential problems that may be encountered in becoming an expat.
Such insurance provides cover on your liability in the event of loss of employment or other disasters impacting on your ability to earn and the PPI on credit cards can include an element of life insurance as well as the principle aim of the cover - insurance in the event of involuntary unemployment, accident, sickness, etc.
All very good so far. However, certainly for Brits anyway, it seems that moving overseas, can automatically invalidate the unemployment, accident, sickness aspect on many policies. So, in becoming an expat, you can lose your right to claim under your policy.
Now, with something as significant as the actual cover becoming invalid, you might expect that the credit card companies would advise you of this change as soon as you tell them you are relocating to another country. Well, perhaps some do, but it seems that some card companies were not doing that – and, as one can go some years without ever claiming, a card holder can be unaware that their insurance has become invalid, while some card companies continue to charge the PPI premiums on the monthly card statements - even though they have been advised that the card holder has moved overseas.
In the particular cases we have seen, there seem to be good guys and bad guys... one major UK bank admitted that the card holder had notified them of their relocation and immediately refunded the relevant premiums that had been paid over some years. Another major credit card company refunded the premiums and made this statement...
“we have recently updated our processes to ensure that when a customer notifies us that they are relocating abroad, they are sent a letter informing them of the changes to their cover.”
However, another major UK High Street bank seems not to take the same view – they say that the payment protection insurance has not been valid since the card holder's move to France, so no claim would be possible, but they they are not obliged to refund the premiums paid over some years, even though the card holder had notified them of their move overseas at the time it was made. This bank has insisted that the policy has been invalid but also wants to keep most of the premiums paid, even though they have not provided the cover! They have referred the card holder to the « small print » of the insurance policy and offered a « goodwill gesture » of about 15% of the premiums paid...
Perhaps this is the level of helpful, caring banking we have all come to expect recently?
We would be interested to hear of any expat experiences of invalid PPI and if the bank has put their hands up and admitted they should have notified the client as soon as they were aware of their move overseas – or if they prefer to keep the money!!
Does this only apply to British expats or can this happen to anyone moving from their home country?
Have you been paying credit card payment protection insurance as an expat, unaware that your cover may be invalid?
Will we be naming names? Watch this space...
