A Guide to Making PPI Claims
With all the mainstream news coverage on the topic, you may already have heard about payment protection insurance (also known as PPI) and the numerous PPI claims that have been made through insurance being mis-sold to people who weren’t actually eligible for the insurance in the first place. The amount of money put aside to compensate customers who were mis-sold by the big PPI sellers is £22bn and the Financial Ombudsman states that they have been dealing with 2000 cases per day in 2014.
Quick recap: PPI was an insurance policy created to help you cover payments on loans and credit cards if you were unable to work through sickness, unemployment or accident.
PPI is not necessarily a bad product and was intended to give peace of mind to cover your payments in tough times. The issue was in the way PPI was sold to people who were not eligible or who didn’t know it wasn’t compulsory, rather than the product itself.
Here’s how to make a PPI claim if you think you might have been mis-sold.
Step 1: What is the reason you feel you were mis-sold PPI?
If you’ve taken out PPI and want to complain about mis-selling, there must be a reason why you feel you were mis-sold. Here are some common reasons for a complaint against a PPI seller.
Common reasons for PPI claims
- PPI was added without your knowledge.
- You were forced into taking PPI by a pushy salesperson.
- You were told that the insurance was compulsory.
- You were only provided a quote for your product with insurance included.
- You were not asked whether you had existing insurance or employer benefits that would cover your payments.
- You were (or soon to be) either retired, self-employed, unemployed, part-time employed, a contract worker or over the age limit and either told the salesperson this or simply were not asked.
- You were not asked about any pre-existing medical conditions or warned that these could affect your insurance.
- You were not informed that stress or back problems were excluded from the insurance.
- You did inform the salesperson about a pre-existing medical condition but were not warned it could affect your insurance.
- When you tried to cancel the insurance the refund offered did not represent a fair refund as is required under FCA (Financial Conduct Authority) guidelines for PPI providers.
- You were told you could not cancel the insurance without taking out a new credit agreement (which is now considered unfair by the FCA).
- You were told you could not cancel the PPI policy at all – which is considered unfair by the FCA.
Step 2: Check you have a valid claim
The tricky part of PPI claims is actually proving that you have been mis-sold. Paperwork from old loans, credit cards and other agreements are often lost or missing so it can sometimes be difficult to track down and get paper evidence to send to the seller.
If you still have an open credit account with your PPI provider then they are obliged by the Consumer Credit Act to supply you with the Terms & Conditions for your PPI agreement. Whilst most will provide this for free, they are able to charge a nominal £1 fee. You might want to include a cheque payable to the value of £1 if you decide to contact them to avoid wasting time with back and forth post.
If, however, your account is closed and dates back a few years your provider might not supply your T’s & C’s. In this instance you might need to submit a Data Protection Act Subject Access Request instead. It costs £10 to do but will get you the information you are requesting from your lender.
Free letter templates to verify your claim
Martin Lewis from MoneySavingExpert has some excellent free letters that you can use to request information from your PPI provider if you need to.
Step 3: Make your claim
At this point you can choose one of two options.
- Write to your lender yourself to make your complaint and explain your case. Or;
- Use a PPI claim service who handle the entire process for you (for a fee).
Making your own PPI claim
The benefit of submitting your own complaint and trying to reclaim yourself is that the only cost associated is time. This process can be quite stressful though and your lender could make it more lengthy and difficult by refusing your claim. If you want to handle your own case, here are some points to consider:
- Use the free templates and questionnaires from the Financial Ombudsman to fully document your case.
- Check your lenders website for more information on PPI claims. Many big lenders have specifics on their claim process.
- Take your case to the Financial Ombudsman if your lender refuses your PPI claim. (Details on complaints to the Ombudsman here).
- Don’t give up! It can be a lengthy and time-consuming process but if you genuinely have been mis-sold then re-submitting your claim and complaining to the Ombudsman is the way to go.