THERE was good news last week for anyone who has payment protection insurance on credit cards or loans.

This kind of cover is expensive and tends to be difficult, if not impossible, to claim on, meaning it is often a complete waste of money.

The only people to benefit are the banks and other financial providers who make billions of pounds a year from selling it.

PPI is supposed to help people with credit card debt, loans and other borrowing if they can't keep up their payments because of job- loss or illness.

But many of those sold policies don't understand how costly it will be, or that they won't be able to claim if they are self- employed, part-time or contract worker, or if they have a pre- existing medical condition.

Many who are eligible to claim think they will receive enough cash to clear their borrowing.

In fact, PPI only covers their monthly payments for a maximum of a year. After that, the debt is their responsibility again, regardless of whether they can afford it.

Other customers don't even know PPI has been added to their credit agreement until they spot it in the small print or realise they are paying extra for it every month. Last Wednesday, the British Bankers' Association (BBA) lost a High Court challenge toguidelines issued by the Financial Services Authority.

'These say financial services providers should contact all customers who have been sold PPI and invite them to complain if they feel they have been mis-sold.

The BBA have 21 days from the date of judgment to lodge an appeal but are unlikely to get the decision overturned.

The Financial Ombudsman Service have received more than 200,000 complaints from people with PPI, half of them in the past year.

In three-quarters of cases, the ombudsman have taken their side and insisted the providers refund their premiums or honour their claim. Thanks to last week's ruling, unhappy PPI customers should now find it far easier to get satisfaction.

Stefan Maryniak, credit expert at uSwitch.com, said: "The decision to uphold the revised guidelines is recognition from the courts that the banks are in the wrong.

"They will no longer be able to dodge the bullet of PPI mis- selling, even in the case of old sales.

"It's also good news for those who haven't yet sought compensation, as the doors now stay firmly open to make a claim, and the banks will have to face the music."

It has been estimated banks and other providers could be forced to return as much as pounds 4.5billion worth of premiums to customers.

Some firms may use the BBA's appeal as an excuse to try to avoid paying up but potential claimants shouldn't be put off.

Teresa Perchard, director of public policy at Citizens Advice, said: "Firms may tell people their complaints have been put on hold, pending any appeal, but people told this can still take their complaint to the Financial Ombudsman."

If you think you were mis-sold PPI, don't wait to be contacted by the bank or financial services firm concerned. Put your complaint to them in writing now.

Say why you are unhappy - whether you didn't agree to the PPI, the adviser lied that it was compulsory, the terms and costs were not properly explained, or because your work or health circumstances mean it wasn't suitable for you.

Explain whether you want your premiums refunded or to have a rejected claim honoured.