Written by: Caroline Wheeldon-Wright
If you’ve ever taken out a loan, mortgage, store card, finance or insurance, then it is well worth checking if you paid Payment Protection Insurance (PPI). If you have you may be eligible for reclaiming PPI.
What is PPI?
PPI is insurance to cover payments should you have an accident, become ill or are made redundant and are therefore unable to work and cover payments. PPI in itself is not a bad thing but unfortunately lenders mis-sold this cover in the past.
There are countless adverts on TV and radio relating to the mis-selling of PPI with companies offering help to reclaim thousands paid out by unknowing customers. I’m sure you’ve also all had plenty of cold calls and texts about this as well.
Before you hand over 30%+ to a PPI retrieval company, take a look at our guide to reclaiming PPI payments. It is simple and means that if successful, you get to keep all of your hard earnedmoney rather than pay a fee. There is no deadline and you can reclaim money from accounts active over six years ago.
Don’t panic if you don’t have details or paperwork
Not everyone saves old banking paperwork and you might not remember what policies you’ve taken out over the years. You can either:
- Check your credit report. You can write to Equifax, Experian and Callcredit and for £2 they will provide you with details of any debts in the last six years.
- Contact your lenders, most will just need a name and address in order to find details. Some have online enquiry forms. For just £1 you can request a copy of the original agreement from your lender. If your account is closed then you can ask for a full breakdown for £10.
When you do have your full details
Within your documentation, look for ‘insurance fee’ or details of the ‘ lender covering payments due to accident, sickness or unemployment’.
Highlight ‘protection plan’ ‘ASU’ ‘loan protection’ ‘loan care’ retail protection’ as this could indicate PPI payments.
How do I know if I was mis-sold PPI?
If the following apply, then chances are you were mis-sold your policy:
- You were told it was compulsory
- The lender did not make it clear that PPI was optional or that there was a cooling off period
- The salesperson could have been pushy or may not have let you continue without signing
- Perhaps they implied/insisted that the product would be more expensive without PPI.
- You didn’t realise you had PPI. In the past there were tick boxes to opt out of PPI which you could have easily missed.
- You were sold the wrong thing. Perhaps you didn’t need the cover or didn’t agree to the policy. Basically you were sold a product that didn’t match your needs.
- You were self-employed, unemployed or retired. PPI is worth nothing to people who are unemployed or retired. If you were self-employed check the details of your policy to see if you would receive payment if your business went bust. You may be due a payment if you wouldn’t receive a pay-out and this wasn’t pointed out to you.
- You had certain medical conditions. PPI does not usually cover existing medical conditions and you should have been asked about this.
Starting your claim
Write or speak to your lender and ask for a refund. Often the complaint can be dealt with via the telephone, or in some cases online banking portal.
As part of the process you will have to fill in the ombudsman’s questionnaire. (insert link: https://www.google.co.uk/webhp?sourceid=chrome-instant&rlz=1C1CHNQ_enGB570GB570&ion=1&espv=2&ie=UTF-8#q=ombudsman%20questionnaire ) Once complete, send it recorded delivery (along with any relevant paperwork) to your lender. Keep a copy.
What if my claim gets rejected?
Do not be put off by this. The Financial Ombudsman can assist you but to receive this help you must have written to your lender in the first instance.
What if I receive an offer?
Fantastic news! Before you get too excited, it is important to check that you have been fairly recompensed. Check through this leaflet (Inset link: http://images.moneysavingexpert.com/images/document and decide if you feel your lender has paid out an appropriate amount.
Still not happy?
You may have had your claim rejected or feel that the payments offered by your lender are unfair. Enlist the help of The Financial Ombudsman Service, a free and independent service designed to settle disputes between financial organisations and customers.
You must wait eight weeks from the date of your first complaint letter unless the bank sends a final letter within that eight week period. This is not a quick service and can take years.
How do I do this?
You must contact the service via their website or on the telephone 0800 0234567/0300 123 9123 (mobile)
You should have already filled in the Ombudsman questionnaire, but if you haven’t, then fill one out and send to the service long with relevant banking paperwork. Remember to keep a copy of the documentation.
You will receive a letter from the service when they have the details of your complaint. They will contact you for any additional information required and with details of offers from your lender.
What if this claim is rejected?
The outcome will be decided by someone called an assigned adjudicator. If you don’t agree then request further investigation or ‘formal decision’ which will be made by an official ombudsman at the service.
This can take several months. Stay positive: you have every right to make this request. The lender must accept the decision made by the ombudsman.
You can take your lender to court via the small claims system. This can be quicker than the ombudsman service but does incur costs (which you will get back if you win). You could pursue this route should the ombudsman reject your claim.