Can I claim PPI if on a Debt Management Plan?
Written by Will Lyon on 23 May 2019
Regardless of what claims management companies may advertise, you don’t need one to make a claim. Although convenient, their fees could mean adding more creditors to your file, which should be avoided whilst in a debt solution.
If you’re in a DMP and you still have outstanding debts to pay, it’s worth taking the time to find out if you’re eligible for a PPI claim. The compensation received will help you to reduce the debt you owe to your creditors, thus making you debt free sooner.
What is PPI?
PPI is a form of insurance. It’s sold to ensure that payments are made should the borrower be unable to make them. Examples of what PPI is intended for are situations such as illness or redundancy. Although it was unknowingly missold to thousands of people before 2012, many of the firms who sold PPI were authorised and regulated by the Financial Conduct Authority.
Why might I be able to reclaim PPI?
You’ll have most likely heard about the PPI scandal via numerous TV/radio adverts. The controversy came from certain loans in which a company would bundle in PPI unbeknownst to the buyer. Some of the most common occurrences were credit cards and unsecured cash loans. The problem was possibly due to miscommunication from the salesperson, and many purchased PPI who weren’t eligible for it.
You may be entitled to PPI compensation if you took out a mortgage, credit card or car finance when:
- You were retired, unemployed or a sole trader
- You had a pre-existing medical condition
- You didn’t want the policy, but was told it was compulsory
It’s important to note that these aren’t all the reasons.
Claims management companies
Claims management companies serve as intermediaries between you and companies you’re claiming PPI from. They check and investigate any claims made by individuals. If a claim is valid, they will then pursue it for a fee.
The main appeal of using a claims management company (CMC) is that they provide a degree of convenience; they deal with the administrative side of a PPI claim. The downside is the amount they charge for the convenience. They usually take around a third of your claim in commission, although rates do vary.
If you feel you’re eligible for a refund, the procedure to claim back PPI is straight-forward, if somewhat time-consuming. Regardless, it can be easily done without the help of a third party, making you savings that can be used to repay your debt.
How do I make a PPI claim without a claims management company?
If you want to reclaim missold PPI without dealing with a CMC, there are several steps you must take.
- Firstly, you need to gather and analyse your documents. These records should include proof of you taking out the policy which you believe has been missold. If you’re struggling to find the paperwork, or you’ve lost your PPI account number, contact your lender; they should be able to give you the information you need.
- Make copies of the documents and forward them to your lenders. Examples of documents could be any loan or mortgage statements. On these documents, you should look for anything entitled ‘protection plan’, ‘payment cover’ or terms to that effect.
- You should then write letters to the providers you believe missold you PPI. The letter doesn’t need to be over-complicated. It just needs to include the information regarding when you believe you were missold PPI, and on which policies. The deadline for PPI claims is 29 August 2019, so you should get your form sent off ASAP.
- Within 8 weeks, you should get a response. If you don’t hear anything before this period has ended, take your claim to the Financial Ombudsman Service (FOS).
If you haven’t heard back about a PPI claim, you can call the FOS on 0800 121 6222.
PPI compensation can help you pay off your debt sooner
As previously mentioned, whilst in a DMP you are well within your rights to claim back PPI. Furthermore, it’s worth your while to make a PPI claim; successfully doing so can get you on track faster towards a debt-free future.
Will claiming for a PPI refund affect my credit score?
The short answer is no – it won’t. Many are hesitant about making an application for a PPI refund. In reality, a claim will have no effect on your credit score and will not damage your credit rating in the future.
If you have been granted PPI compensation by a bank you owe money to, the bank may well take your refund and put it towards paying off your debts. This is known as ‘Setting Off’. It may seem frustrating at first, but will be beneficial in the long run, as you will be debt free sooner.
As one of the UK’s leading debt management companies, we believe in getting you debt-free as soon as possible. We believe it’s always a great idea to check if you have a legitimate PPI claim, however unsure you are.
If you’re already in a DMP and feel you may be eligible for a PPI repayment, contact your case manager today. They will be happy to advise you on the subject.
We have a variety of debt solutions available to those struggling with debt. If you’re worried about your finances, give us a call today on 0800 280 2816
Filed under Debt Facts