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How do you reclaim your PPI?

Can you reclaim your PPI?
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What’s PPI? I’m sure most of us will have been there, sat in the bank, shop or on the end of a phone, nervously waiting to see whether we have been accepted for a loan, mortgage, credit or store card and then signing on the dotted line without really checking the small print. The problem is that we have had payment protection insurance (PPI) mis-sold to us by banks for years, but after losing in court, the banks have now put aside £9billion to pay back money owed.

Step 1 – It could be you?

Firstly, check your statements to see if you are paying PPI; it may be in the form of a monthly amount, or may have been bulk loaded to the start of the loan at the beginning. If you are unsure, then call or write to your credit provider and ask for a copy of the statements and whether any PPI is associated with it. If your account is still open, you have a legal right to get your credit agreement for £1, but if your account is closed and your lender can’t find your policy, you can ask them for a full breakdown of your account, but you may incur a £10 administration fee to get this.

Step 2 – Were you miss sold PPI?

If you are paying PPI then the next step is to establish whether you believe it was mis-sold, so ask yourself the following questions:

  • Were you told the insurance was compulsory in order to be accepted for the loan?
  • Were you told the policy was optional and there is a cooling off period?
  • Were you told that taking out PPI would help with the loan application?
  • Was the salesperson very pushy or aggressive in their tactics when selling the insurance?
  • Were you told that the loan would be more expensive without the insurance?
  • Were you self employed, unemployed, retired or had outstanding medical issues that would render the policy void should you wish to claim, yet you were still sold it?
  • Did you know you were even paying for PPI? Many online forms (pre 2007) had the PPI box already pre-checked or in some cases, it was added to the loan or card without your knowledge whatsoever.Can you reclaim your PPI?

If any of these apply to you, then you may well have a case to reclaim your PPI and it is actually much easier than you may think.  At the moment we are being bombarded with adverts, calls, texts and emails from companies offering to claim PPI on your behalf, but be warned – they will take up to 30-40% of your claim should you win. Unless you really feel the need for help from these companies then most people can claim themselves by using some simple template letters (in many cases, just one letter or phone call can result in payment back to you).

Step 3 – Claim!

There are several letter templates / questionnaires available online that you can download. You then fill in your details and answer the questions within and give any additional reasons for why you believe the policy was miss sold. If you have any documentation to support your claim then include that, then send to the lender by recorded delivery. Once you have done this, the lender should then write to you within 5 working days to acknowledge receipt of your letter. They then have 8 weeks in which to make a decision on your claim and then inform you of the result of their decision.

Step 4 – What next?

If they uphold your claim, you will be given a breakdown of the offer including any interest owed to you and will be paid within 28 days from you agreeing to their offer. If you are unhappy with their offer you can write back and reject this, giving reasons why you feel this is unacceptable. If the payment is related to a loan, card or mortgage that is currently open, you will be provided with a new credit agreement with any alterations to your monthly payments.

It is also worth pointing out, that if you have any other outstanding debts with that lender, they can use the payment back to you to offset any additional debt with them, so do bear this in mind before you start planning to spend!

Step 5 – My PPI claim is rejected, what can I do?

If your claim is rejected, please don’t be put off! Many banks are playing hardball and hoping that initial rejection will stop claimants pursuing them. Their decision is definitely NOT the final one, so if you are in this position then take your case to the Financial Ombudsman. You will have 6 months to put your case to them and the majority of cases that get to this stage are upheld by the Ombudsman and payment is awarded in the consumers’ favour, so it’s well worth taking it further.  At this point, if your claim is rejected by the Ombudsman, then it will be the end of the road for that particular claim, but that won’t stop you trying to claim for another policy you believe was mis-sold. PPI can be very useful to have if you are made redundant or can’t work through accident or injury, so if you have taken out PPI and were fully aware of what the policy included and happy to take it, then don’t expect to be able to claim it back!

Step 6 – Show me the money!

If your lender has upheld your complaint, then payment will be made up from three elements. You will receive the refund of the PPI you paid, a refund of the interest you paid on the premium and a statutory 8% interest on the total amount. You won’t need to pay tax on the PPI refund or the interest on the premium, but you will need to pay tax on the 8% total interest paid to you depending on what tax bracket you fall in.

Don’t pay a company to claim your PPI, it’s your money

People are claiming up to tens of thousands of pounds back from banks who have mis-sold policies to them, many from just a simple 10 minute form they sent. With so much information out there now to assist you, now is the time to check your paperwork and see if you are one of the many who are owed money.

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About Rebecca Robinson

About Rebecca Robinson

After spending the last 8 years juggling life as a mum of two, wife and working full time as a Project Manager for a global telecommunications company, Rebecca Robinson made the decision to follow her love of writing and took the plunge; turning her passion into a full time career. Since becoming a full time writer, Rebecca has worked with various media and copy-writing companies and with the ability to make any topic relevant and interesting to the reader, now contributes to The Working Parent on articles ranging from credit cards to teenage relationships. Ever the optimist, Rebecca's dreams for the future include a house in the country filled with children, dogs and horses in the field!

Website: Rebecca Robinson

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