MILLIONS of people still need to claim their refunds for Payment Protection Insurance and the deadline is fast approaching.
Around 60 million PPI policies were sold over the past three decades – according to Britain’s Financial Conduct Authority (FCA).
The watchdog says that since 2011 more than £30bn in redress has been received by consumers.
But there are still plenty of people who still need to claim, and a new ruling means that customers who have had claims rejected may need to appeal.
The same ruling also means that simply having PPI might be enough to get you some money back – even if you knew you were being sold it.
Making a PPI claim is easy, but with only six months until the deadline, you need to move quickly.
Here’s everything you need to know to make a claim.
When is the PPI claim deadline date?
The deadline for making a PPI claim is August 29 2019.
That means you need to get your complaint to the your provider or the Financial Ombudsman Service on or before this date – or it may not be considered.
If you’re complaining by post you need to leave enough time for your letter to get to the company.
It might be worth sending it by tracked post so you can prove it reached its destination on time.
You can complain over the phone, but be aware that lines close at midnight and may be tied up if lots of people leave their complaints to the last minute.
If you’re complaining in-branch, make sure you make a note of the closing times.
Whatever way you choose to apply, you’ll be better off acting sooner rather than later, and the watchdog is urging consumers to get their complaints in quickly.
What is payment protection insurance?
PPI was an insurance policy attached to credit agreements such as loans, mortgages or credit cards.
The idea of these policies was to cover payments when a policyholder fell ill, had an accident or lost their job.
Sales of these policies were popular from the nineties and into the new millennium.
But then consumer groups started raising questions and a series of investigations revealed that lots of people had been sold policies when they shouldn’t have been.
One problem was that sales staff were incentivised to sell PPI at all costs, meaning lots of people ended up being mis-sold to.
Some consumers had policies sold in the small print that they weren’t aware of, others were sold insurance they would never be able to claim (for instance because they were self-employed or retired).
Sales of single-premium PPI policies were banned in 2009 and despite initial opposition, lenders were ordered to consider all PPI complaints in 2011.
How do you check if you have PPI?
You will need to check the documents you signed when you took out a financial product such as a mortgage, loan or credit card.
It’s also worth looking at any statements you received, particularly if you’ve lost the original paperwork.
Make sure you check the terms and conditions carefully looking for whether you were sold PPI.
Frustratingly, PPI has a lot of different names, but the FCA has a useful list of terms to look out for:
- accident, sickness and unemployment insurance (ASU)
- account cover
- credit insurance
- credit protection
- loan care
- loan insurance
- loan protection
- loan repayment insurance
- mortgage payment protection insurance (MPPI)
- payment cover
- protection plan
If you’ve lost all your paperwork, you should ask the company who sold you the financial product.
Many providers now offer online checking tools to help you check if you had PPI, and will usually get back to you within 8 weeks.
If you can’t find any of the paperwork or aren’t sure what loans you had in the past, you need to check your credit report.
This will give you a list of all the credit agreements you’ve had.
Write to all of the companies to find out whether you had PPI.
It’s helpful to provider your full name, your address at the time you got the product and any other details you can glean.
You should receive a response in 40 days. It could be much quicker, but as the deadline approaches it’s important to give yourself enough time to gather all the information.
How to check if you can claim for mis-selling?
The Financial Conduct Authority has a handy checklist to help you work out if you have been mis-sold. If you can answer yes to any of these then it is worth making a claim.
- Were you pressured into buying PPI?
- Were you told you must have PPI?
- Were you advised to take out PPI that did not suit your circumstances?
- Were you promised a cheaper rate or a better chance of acceptance of the loan or credit, if you took PPI?
- Was PPI added without telling you? Some agreements added PPI automatically with pre-ticked boxes so you had to opt out, not in
- Were you self-employed, unemployed or retired but advised to take PPI?
- Did you have a pre-existing medical condition?
- Were you advised if this condition was (or was not) included in your PPI?
- Was it not made clear that you would pay interest on the PPI if it was added to your loan?
- Was not it made clear that the PPI cover would end before the loan or credit was repaid?
If you made an insurance claim through PPI you could still be eligible.
If the claim was successful the money you received will be deducted from the amount you’re owed for PPI mis-selling.
If your insurance claim was unsuccessful you can make a complaint too, but if it has been more than three years you may be rejected.
The new ruling that means you can claim even if you weren’t mis-sold
A new ruling – known as “Plevin” means that even if you took out PPI and thought you knew what you were doing, you could be owed cash.
This is because the huge amounts of commission financial institutions earned from PPI.
In a nutshell the ruling means that if more than 50 per cent of your payment went on commission and that wasn’t explained, you’ll be owed back all the interest above that.
The average commission paid on PPI was 67 per cent. This means that for most people – even just having PPI is enough for a refund.
It also means that if you’ve been rejected in the past, you may be due redress.
As of August 29, 2017 1.2million claims that had been rejected are now eligible under this ruling, so it’s worth double checking and appealing.
How to claim a refund for PPI
First you need to contact the business that sold you the product and they must respond to your complaint within eight weeks.
If they reject your claim you can then go to the Financial Ombudsman Service to have your case reviewed.
HOW MUCH CAN YOU CLAIM BACK?
IF your claim is successful, the amount you get depends on your circumstances.
Ultimately you should get back all your premiums plus interest.
Between £300 million and £400million has been paid out per month in recent years and the average payout is around £2,000
It doesn’t cost anything to complain. There are free template letters you can download from websites such as MoneySavingExpert.co.uk.
Consumer group Which? has also created a free tool to help people make claims.
There are plenty of claims handling companies who are trying to get people to complain through them.
There’s no need to do this, and it will cost you money!
Processing the claim yourself means you’ll get to keep all your compensation.
What happens if your claim is rejected?
Banks have been fined repeatedly for failing to deal with complaints properly and some cases may have been wrongly rejected.
If your claim has been rejected by your bank or lender then take it to the Financial Ombudsman.
The ombudsman is an independent service that settles disputes between financial providers and consumers.
It’s free to use and will decide whether your provider should have paid up.
Even if the Ombudsman has already rejected your appeal, you might be able to complain under the “Plevin” ruling.
If over 50 per cent of your PPI bill went on commission to the lender and you weren’t told about this then you are due a refund above that amount.
The new rules have been set by the FCA but didn’t come in until August 29 last year.
If you think you were mis-sold, you should escalate that to the Ombudsman first, but this is another option that opens up claims for millions more people.
Martin Lewis, the founder of MSE, said: “Until now, you were usually only due money back from PPI if the firm had either given you an inappropriate policy, such as employment cover for the self-employed, or lied to you, like saying PPI was compulsory.
“Yet with Plevin, in most cases it’s simply a case of ‘Did you have PPI? Then you are owed money.”
Re-opening of cases
The Financial Ombudsman Service (FOS) may have to reopen thousands of PPI cases after an undercover investigation revealed how complaints handlers had inadequate training, in some case having to use Google to search for products.
Undercover reporters from Channel 4’s Dispatches programme spoke to FOS employees.
One said faced with tough targets the FOS has been ‘churning’ out decisions and that it was ‘not feasible’ to handle all claims.
According to a report in The Times, when one employee was asked if it was easier to rule against the person making a claim they were heard to reply: “Yeah, because you just need to make one call to the consumer, rather than trying to persuade the business, which is actually a lot harder.”
Another said they had “just taken a chance and just slung stuff through, with any old decision”.
One employee of 18 months said: “Even now I look at an investment case and I don’t know what to ask for. Sometimes I’ve not even heard of the products. I have to Google what it is first.”
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