How to Reclaim Mis-sold PPI

How to Reclaim Mis-sold PPI

by Rebecca Hall on 12 May, 2011

UK Moneymarket has compiled a checklist to reclaiming your money if you are a victim of the mis-sold Payment Protection Insurance (PPI) scandal. An estimated £9 billion in compensation is due to customers who were mis-sold PPI by lenders.

PPI Claim Checklist:

1.Do you have PPI and all the paperwork?

Even if you have already made a claim through the payment protection insurance, the regulations state you can still reclaim. You can also cancel your insurance if your complaint is unsuccessful.

You can reclaim PPI in the following circumstances:

•It was sold to you or started within the last six years

•The policy is currently active or ended within the last six years – your chances of compensation are reduced if you were aware of the mis-selling or the account itself is very old.

•The policy ended over six years ago – this reduces your chances of receiving a payout unless you have retained the paperwork, although note even this does not guarantee a successful reclaim.

Your chances of succeeding in reclaiming PPI increase if you have all your paperwork including the terms and conditions of the loan. Your lender should be able to provide you with a copy, although some will charge £1 for providing this. Note that terms and conditions will change over time and the copy you have must relate to the time at which you were sold the PPI.

Money Saving Expert have a great tool for calculating how much you may be owed, click here for details.

2.Were you mis-sold PPI?

The following categories are grounds for making a claim for mis-sold PPI.

•If you were told Payment Protection Insurance was compulsory then it was mis-sold to you, including being told you must buy PPI in order to be accepted for the loan. As part of the Lending Code, to which lenders must subscribe, lenders agree not to insist the customer purchases an additional insurance product from them as part of the loan.

•You weren’t aware you had PPI Cover: if you have checked your loan agreement and found you were paying an insurance premium as part of your repayments, then you can reclaim. Check your paperwork – pre-2007, some forms required you to tick a box to opt out which is unfair practice.

•You were misguided as to what you were buying: including the total cost of the PPI or where you were already covered by your work or partner’s insurance, or the policy was not the one you agreed to. If you were self-employed, unemployed or retired at the time of taking out the policy, it is worthless.

•Your past medical history: most policies excluded pre-existing medical conditions – you should have been asked about these and told that the policy would be useless should a past illness or condition be the cause of a claim.

•Your provider has already been fined by the FSA for not treating customers fairly.

3.Contact your lender

There are a number of reclaim template letters available on the internet that you can use, and the overarching advice here is not to accept rejection at the first attempt.

Reclaiming your PPI cancels your insurance – so make sure you consider whether you will need the PPI in future before making a claim. You can use the Financial Ombudsman’s PPI Reclaiming Questionnaire to see how your claim stacks up in terms of the sale of the policy.

If you have already initiated a claim for mis-sold PPI and it was put on hold, you should expect your bank to restart investigation of your claim, but it is advisable to contact them to ensure they do so.

4.Contact the Financial Ombudsman

If you don’t reach a satisfactory conclusion with your bank directly then contact the Fincancial Ombudsman Service through their website or call 08000 234 5679 (0300 123 9123 from a mobile).The FOS investigates each case on an individual basis, and is free to use – although it can only help eight weeks from the date of your first letter, and the process is not very quick, but given the ease of use and potential compensation involved (in most cases every premium you have paid plus interest) it is worth the wait.

About the Author

Rebecca Hall

Rebecca Hall worked as an independent mortgage adviser for 10 years before turning to financial journalism full time. She has strong links to the CAB advising families on mortgage refinancing.