What is PPI?
Payment protection insurance or PPI is a form of insurance that was often sold with loans, credit cards, mortgages and other types of credit such as car finance or catalogue accounts. Payment protection insurance was designed to pay out if you were unable to work due to illness or redundancy, but the product was often mis-sold, either being added to a loan without consent or by advisers telling people that the only way they would get credit is by taking the additional payment protection insurance.
How do I know if I was mis-sold PPI?
You may have been mis-sold PPI if any of the following apply to you:
- you didn’t agree to take out PPI, but it was sold to you anyway
- it wasn’t made clear to you that you were taking out PPI - and you didn’t actually want it
- you were told that it if you didn’t take out PPI, you wouldn’t get your credit card, loan or other credit - or you felt pressured into taking it out
- your PPI wasn’t properly explained, or you were advised to take out a policy that wasn’t suitable for you - and if things had been done properly, you wouldn’t have taken out the PPI
When is the deadline for making a PPI claim?
Recent figures from the Financial Conduct Authority (FCA) show that more than 3.9m people accessed the PPI website and their dedicated contact centre received over 44,000 calls in April 2019. In the same month, a total of £334.3m was paid out to customers, taking the total amount paid out since 2011 to £35.3bn. If you are thinking of making a PPI claim, you'll need to act quickly as your claim needs to be with your provider by 29th August 2019.
Remember that your complaint needs to reach your provider by 11.59pm on 29th August 2019, so don't leave it until the last day to make a claim.
How do I make a PPI claim?
There are two ways of making a claim. You can use a claims company to handle the claim on your behalf or you can do the work yourself. We have provided the pro's and con's of both options below.
|Ways to claim for mis-sold PPI||Pro's||Con's|
|Use a claims company||Good for loans taken our before 2005 and where finance was not provided by a bank. Good if you struggle with forms or have mental health issues or illiteracy. Good if you lead a busy life or wouldn't bother claiming unless someone else did the work for you.||You will lose around 20% of any proceeds, plus VAT. You may still have to field phone calls and complete forms.|
|Handle the claim yourself||You will receive 100% of the proceeds. You only need to know the provider and provide your name, date of birth and previous addresses to get started.||You will have to complete the forms yourself and handle the claim from start to finish.|
How to check if you had PPI
Many people have put been put off reclaiming PPI because they do not know the full details and cannot remember the specifics of the loan or credit card they took out. It is important to remember that if the loan was active up to six years ago, your provider should have all of the information as they are legally required to keep records.
If you don't know if you took out PPI, you could try going through your paperwork, including any emails and check for any mention of words such as fees, insurance, protection, policy or cover. Look also for any mention of how you would pay for the loan in the event of losing your job through accident, sickness or unemployment. Other key words to look out for are PPI, ASU, protection plan, loan protection, payment protection or loan care.
If you can't remember which lenders you have used in the past then you can check your credit report as it will list all the lenders you have used in the last six years, even if the loans have been fully repaid and subsequently closed.
How to make a PPI claim if you cannot find the paperwork
If you know the lender you used but have lost the paperwork then you still have plenty of options. Firstly, contact the lender and ask them whether you had PPI. Some lenders will ask you to complete a simple online form that ask basic information such as your name, date of birth and when you had the loan or credit card. You should receive an answer in writing within 40 days and you then have the choice as to whether you wish to submit a complaint.
If the provider is unable to tell you whether you had PPI than you can ask them to send the original paperwork and terms and conditions from your product, even if the loan is fully repaid and closed. You may need to ask via the lender's 'subject access request' form and while you may find it more difficult to gather information this way, especially if your loan ended more than six years ago, the FCA insists that all companies should assist with any PPI enquiries; so don't be deterred.
There is no limit to how far you can go back in order to make a claim. Most PPI policies were sold between 1990 and 2010 (although some do go back further). Just make sure you make your claim before the deadline on 29th August 2019.
How you can make a PPI claim even if you were not mis-sold
In August 2017 a court case known as 'Plevin', named after the claimant Susan Plevin, ruled that she was treated unfairly because she wasn't told about a large amount of commission that was being paid to the bank from her PPI payment. This means that even if you were not mis-sold PPI, you could still claim under the Plevin rules and in fact, there were 1.2 million whose claims had been turned down (as of 29 August 2017) who were then eligible under the Plevin rules.
What is the best way to make a PPI claim?
Consumer website MoneySavingExpert has provided an excellent guide and if followed correctly, will ensure that you have the best chance of making a successful claim. It is a lengthy guide but it's worth reading from beginning to end as it provides all of the information you need.
If you know the lender you need to write to and have the relevant information in order to make a claim, you can skip to step 4 and use the handy PPI template letter that MoneySavingExpert has provided.