A Guide to PPI Claims and Claiming back Premiums

1. What is PPI?

Payment Protection Insurance (‘PPI’) was insurance sold by lenders alongside loans, credit cards, mortgages etc designed to cover payments in the event of Accident, Sickness or Unemployment.

2. Did your product include PPI?

Many people will not know whether they were paying PPI. Here are some suggestions about how to find out if PPI was included in your product:

Loan

If you had a personal loan with PPI, this would normally be shown on the original agreement. Look for references to ‘Payment Cover’, ‘PLP loan’ (Personal Loan Protection loan), ‘ASU cover’ (Accident, sickness and unemployment) or similar terms.Credit cardsIf you were paying PPI on a credit card, this would normally show up on your monthly statements. Credit card PPI was generally calculated as a proportion of the monthly balance, usually about 70p per £100 per month. Therefore, if you balance was £1,000 in any given month, you should look for an item on your credit card statement for around £7.00.MortgagesAgain, check your original agreement and any documents with which you were supplied at the time of taking the mortgage. Please note that, in respect of insurance sold alongside a mortgage, Life and Critical Illness cover is different from mortgage PPI and not subject to the Financial Services Authority’s provisions on compensating customers who were mis-sold PPI. There is no reason in principle why you cannot complain about the sale of such insurance, which protects dependents in the household, such as children or a spouse, in the event that the person who pays the mortgage either dies or is diagnosed with a critical illness. However, different criteria will be considered and your lender is under no obligation to refund you the premiums.

3. What if you have not retained the documents?

Here are some tips about what you should do if you are unsure about whether you had PPI or if you can’t find the documents: You will be able to Claim PPI with No Paperwork
Contact your lender’s loans, credit cards or mortgages department (as applicable) and try to obtain details of the product, ideally including the agreement number, the start date of the agreement and clarification of whether you were paying PPI and the amount;If you are unable to retrieve this information from your provider, you might consider using a credit reporting agency.You might consider sending a Subject Access Request (‘SAR’) to your lender, requesting details of all products you’ve held with them which have been active within the last six years. You should enclose a cheque for the fee of £10, which your lender is entitled to charge for complying with the SAR. Your lender should respond within 40 days of receipt of the SAR.4. What is the FSA?The Financial Services Authority (‘FSA’) is the body which has regulated all sales of PPI since 2005.

5. Why are people complaining?

In August 2010, the FSA identified numerous examples of mis-selling PPI, such as:
Leading customers to believe that PPI was compulsory, or failing to explain that it was optional;Pressuring customers into taking PPI;Failing to explain the terms and conditions clearly, including any exclusions and limitations;Selling the cover to customers who would be ineligible to benefit due to falling foul of the exclusions. For example, those with a pre-existing medical condition and those not in full time employment (eg, retired people, the self-employed, students etc.)

6. How much can you reclaim?

The FSA’s measures state that customers who were mis-sold PPI are entitled to be put in the position they would have been ‘but for’ the mis-selling. Generally, this means that you are entitled to a full refund of all bank charges, plus interest up to the date of payment.  See our online PPI calculator to give you a rough estimate of what you may be able to reclaim.

7. What was the court case all about?

The banks complained that the FSA’s provisions were unfair, since they applied standards retrospectively, especially in relation to per-2005 sales. The FSA argued that the pre-2005 rules were similar to those under FSA regulation. The High Court found in favour of the FSA, paving the way for countless PPI complaints.
8. Are there any deadlines?

You have the longer of six years from the date of sale or three years from the date that you became aware, or ought to have become aware, of the cause for complaint to complain. In practice, most people have only become aware of the cause for complaint in light of recent publicity. Therefore, you might still be able to complain about a sale of PPI which took place more than six years ago.

9. Who is the Ombudsman?

Financial Ombudsman Service (‘FOS’) is the arbiter of complaints relating to sales of PPI which took place since 2001. FOS will consider any complaint regarding a post-2001 sale of PPI which has been rejected by your lender. However, if the sale of your policy was before 2001, FOS will not have jurisdiction to deal with the complaint and your lender’s decision will be final.

10. Do you need representation?

It is not compulsory to have representation. Many people elect to deal with their complaint personally. However, some people prefer to instruct a solicitor or claims handler to deal with the matter on their behalf, taking the burden away from them. Should you opt to deal with the matter yourself, you should ensure that you arm yourself with the appropriate information and approach the matter in an organised way.

11. Next step?

If you would like us to assist with your PPI complaint then complete our online contact form and an advisor will call you back to discuss your case.