You’ve probably heard about the mis-selling of payment protection insurance, the ‘reclaim PPI’ adverts, and the huge refunds some people have received. Because of the big payouts that some people are entitled to, claims management companies have sprung up, trying to earn commission by claiming refunds for you.
But reclaiming PPI isn’t as difficult as you might think, and we highly recommend that you reclaim any mis-sold PPI yourself. It’s free, and we can show you how.
In this article we’ll explain a bit more about what PPI is. We’ll also show you how to find out if you had PPI, tell you about the deadline for claims and explain the new ‘Plevin’ rule which applies to any PPI sold from 2008 onwards.
Payment protection insurance (PPI) is a product sold alongside loans and credit cards to help customers with repayments in the event of accident, sickness and unemployment.
While some customers have been able to benefit from the cover such a policy provides, in the past some customers were mis-sold PPI policies. Because of this, lenders have had to compensate their customers, setting aside billions of pounds for this purpose.
How do I reclaim PPI myself?
While fee-charging companies would have you believe the process of reclaiming mis-sold PPI is complicated, the process is straightforward.
You have no less chance of reclaiming mis-sold PPI if you do a personal claim, than if you were to go through a claims management company.
MoneySavingExpert has a free PPI resolver tool, or use the Which? PPI tool, to help you create a letter to start the claims process.
Is there a time limit on claims?
There is no limit on how far back you can claim PPI, but be prepared that if you don’t have your paperwork you may be unable to make a claim.
Lenders are only required to keep the last six years of records, so if your debt is older than 6 years and you don’t have the paperwork, it may be very difficult to make a claim.
If you’ve kept the loan or credit card paperwork then the original paperwork will show if you took out PPI. Make sure you check for wording such as card or loan “protection cover”.
If you’re unsure whether you had PPI and can remember who the lender was (or still bank with them) it’s worth contacting them to check.
Some banks provide online enquiry forms for you to make a request. In other cases, you may have to pay a small fee ranging from £1 to £10 for a copy of the agreement.
Get a copy of your credit report which will show all debts that were active within the last six years. You can then request the paperwork from the lender by writing to them, and check for evidence of PPI.
You’ll need to explain in your claim how you were mis-sold the PPI unless the ‘Plevin rule’ applies to you.
A recent ruling in court has meant that in many cases, just having PPI means that you were mis-sold I under the ‘Plevin rule’. If over 50% of your PPI cost went to the lender as commission and this wasn’t explained to you, you are due a refund.
For this to count though, you need to have still had an active account from 2008 onwards.
I’m on a debt solution: can I still make a claim?
Yes, but depending on your situation you need to bear in mind that you may not always be able to keep the claim funds, and you’ll need to cancel the policy.
Your insurance policy will be cancelled by the lender when you make a claim so think about whether you may need to make a future claim. If you do need to keep some cover you may be able to find a cheaper policy through an alternative provider.
If you’re within your debt relief order (DRO) moratorium period we recommend that you call us to discuss your individual situation FIRST, as you probably will not find you benefit from making a claim.
If you make a claim after you’ve gone bankrupt, you must pay all of the refunded PPI to the official receiver, even after you’re discharged from your bankruptcy. This means you won’t benefit from making a claim.
If you’re on a DMP the lender may put the refund towards reducing your debt to them rather than sending you a cheque.
Alternatively, if the lender sends you a refund directly, you’ll need to discuss this with your DMP provider. Your refund could help you reduce your debts or pay for essential household items which may have been unaffordable otherwise.
If you’re currently repaying your debts through an IVA any refund you get will need to go into the IVA. In some cases, this can mean you can settle your agreement early.
Read this article for more details on reclaiming PPI on an IVA.
If you’re up to date with payments to the debt with the PPI, or you have repaid the debt in full, then you should receive your refund directly from the lender, usually by cheque.
If you’re in arrears (say if you’re a client of ours), the lender may automatically put the refund towards reducing your debt to them rather than sending you a cheque.
What if I’d like a company to manage my claim?
If the lender rejects the PPI claim, and you still believe your claim is valid, you can appeal to the Financial Ombudsman Service (FOS). This is a service set up by the government to provide free and independent resolution to complaints between consumers and financial institutions. They’ll review the case and either rule in favour of you or the lender.
Due to the large volume of PPI complaints escalated to the FOS, it may take a number of months for them to review your complaint.
What’s the deadline for claiming back PPI?
The Financial Conduct Authority (FCA) who regulates the banking industry has now set a deadline to finalise all PPI claims by 29th August 2019.
We recommend that you start to investigate your claim as soon as possible to beat the rush!