It May Not Be Too late To Make a Claim For Payment Protection Insuance (PPI)
It May Not Be Too Late To Make A Claim For Payment Protection Insurance (PPI)
According to ‘Which?’ the banks have written to 5.5 million customers, letting them know they might have been mis-sold PPI and offering three years in which to make a claim. Although some of these letters were sent in 2013, people are still successfully claiming PPI from banks and other lenders.
A potential final deadline of June 2019 has also been announced by the Financial Conduct Authority (FCA). If this is confirmed, it offers plenty of time to write to lenders and recover the money that should never have been taken from you.
By making a claim yourself rather than using a claims management company, you can save up to 30% of the compensation awarded. The firms involved in this type of financial mis-selling now operate more efficient procedures for paying compensation and resolving disputes, and many people have benefited from claiming independently.
Banks and other financial institutions have been forced to set money aside for PPI claims, making payouts quicker and the process a little easier.
Could you have been mis-sold PPI?
Payment Protection Insurance was sold alongside loans, credit cards, and consumer credit agreements for items including kitchen goods, technology, and cars. PPI could have been mis-sold to you in a number of ways, including these scenarios:
- You were pressured by the salesperson, or told it was compulsory.
- You were self-employed, unemployed, or retired when the policy was taken out.
- You had a pre-existing medical problem.
- A clear explanation was not given of how much PPI you were going to pay, or if it was included in the total loan quote.
- You already had cover in place within another policy – life insurance, for example.
- You were not informed of the ‘cooling-off’ period during which you could have changed your mind.
- They told you the loan would be more expensive if you didn’t sign up for PPI.
To establish whether or not you’ve paid PPI in the past, check your credit agreements or other loan documents if you still have them. If not, you should get in touch with the lender by phone or letter.
You might also want to obtain a copy of your credit report, which will list the lenders you have dealt with in the past. The three main credit reference agencies in the UK are Experian, Equifax and Callcredit – you can sign up and order your credit report online for a small fee.
Contacting the lender
If you no longer have your loan agreement, write to or phone the company concerned. Many larger financial organisations will be able to tell you over the phone whether or not you’ve been sold Payment Protection Insurance. You can also request a copy of your original agreement.
Some companies can deal with your entire claim by phone, or online. The Financial Ombudsman Service also has an online questionnaire, and allows you to upload any supporting documents. Otherwise, you should print it off and sent it by recorded delivery after taking a copy for yourself.
When the company replies
You receive a positive response
Lenders have eight weeks in which to respond, and if you’re successful your refund will depend on various aspects of the loan agreement:
Credit cards and mortgages generally had a regular PPI premium attached, rather than one single premium. If this was the case, you should receive a refund for the premiums paid. If interest had been added, this amount should also be refunded.
Single PPI premiums were often paid in relation to personal loans and finance agreements. How much you receive depends on whether the loan is still in force:
- If your loan is ongoing, the lender will calculate the monthly amount you should have been paying (minus the PPI), and this will be deducted from the total amount outstanding.
- If the loan has been repaid in full, you’ll receive a refund for the amounts you paid. The lender should also calculate a new redemption figure as though the PPI had never been paid, and repay the difference between this and the amount you actually repaid on redemption.
If the claim is rejected
Should there be no response from the lender within eight weeks, they reject your claim, or you are unhappy with the refunded amount, you can contact the Financial Ombudsman Service for a decision. This must be done within six months of the lender’s final response to you.
The Financial Ombudsman Service is the official channel through which disputes are settled between consumers and lenders. If your case is taken on, they will confirm in writing that an adjudicator is looking at both sides of the dispute, and expect the lender to back up their decision with further information.
It may take up to two years to reach a decision, and any interim offers made by the lender will be forwarded to you. If you’re not happy with the final outcome, you can request that an official ombudsman reviews your case for a second opinion.