PPI Claims
The mis-selling of Payment Protection Insurance (PPI) on personal loans, secured loans, credit or store cards has been so severe, some people might not even know they have it.
Anyone who's got or had one of these products may be able to reclaim £1,000s back from the banks and companies that have mis-sold them.
Anyone who's got or had one of these products may be able to reclaim £1,000s back from the banks and companies that have mis-sold them.
How easy is PPI Reclaiming?
Two of the main consumer regulators in the UK: the Office of Fair Trading (OFT) and the Financial Services Authority (FSA) are carrying out investigations into high-pressure selling tactics that have resulted in so many PPI polices being inappropriate and therefore mis-sold.
What does reclaiming involve?
Reclaiming PPI, unlike cancelling Loan Insurance, means that not only are you going to save money on future payments, but you'll also be getting a refund on the money already paid because the policy was mis-sold.
You need to check if you have the insurance first and then see if you fit into one of the mis-selling categories. PPI is sold alongside mortgages, overdrafts and catalogues (basically anywhere you borrow money, as well as loans and cards) so check your statements to see if you've been paying without knowing.
If you think you were mis-sold you can write a letter to your lender and in the worst-case scenario, take your complaint to the Financial Ombudsman Service or other relevant trade association, which is completely free.
Alternatively, you could use a fee-free claims service where you only pay a fee if they are successful in getting your claim repaid to you. It all depends on how much you enjoy trying to get money out of banks!
How far back can you go?
If Your PPI Policy:
- Started in the last six years, whether you're still using it or not: Reclaim and ask your lender for a copy of the paperwork if you no longer have it.
- Started over six years ago and you are either still using it, or it ended within the last six years: Reclaim and ask your lender for a copy of the paperwork if you no longer have it. Your chances of success may be reduced if you have been aware of the mis-selling for some time, you have already complained or your account is very old.
- Ended over six years ago and you have the paperwork: Reclaim, although your chances of success are reduced, as it will depend on what you can remember about the sale.
- Ended over six years ago and you do not have the paperwork: Do not start a reclaim. As lenders only have to keep records for six years, if no one has a record of the contract a reclaim is unlikely to be sucessful.
When NOT to reclaim
You won't be able to say the policy was mis-sold if you've ever received a payout from your insurance, i.e. money to cover your loan or card repayments. You may be able to cancel your policy though.
Only start the process if you definitely want your insurance to come to an end. Reclaiming almost certainly means that your insurance will be cancelled, as you are effectively saying it is not suitable to your needs.
What does reclaiming involve?
Reclaiming PPI, unlike cancelling Loan Insurance, means that not only are you going to save money on future payments, but you'll also be getting a refund on the money already paid because the policy was mis-sold.
You need to check if you have the insurance first and then see if you fit into one of the mis-selling categories. PPI is sold alongside mortgages, overdrafts and catalogues (basically anywhere you borrow money, as well as loans and cards) so check your statements to see if you've been paying without knowing.
If you think you were mis-sold you can write a letter to your lender and in the worst-case scenario, take your complaint to the Financial Ombudsman Service or other relevant trade association, which is completely free.
Alternatively, you could use a fee-free claims service where you only pay a fee if they are successful in getting your claim repaid to you. It all depends on how much you enjoy trying to get money out of banks!
How far back can you go?
If Your PPI Policy:
- Started in the last six years, whether you're still using it or not: Reclaim and ask your lender for a copy of the paperwork if you no longer have it.
- Started over six years ago and you are either still using it, or it ended within the last six years: Reclaim and ask your lender for a copy of the paperwork if you no longer have it. Your chances of success may be reduced if you have been aware of the mis-selling for some time, you have already complained or your account is very old.
- Ended over six years ago and you have the paperwork: Reclaim, although your chances of success are reduced, as it will depend on what you can remember about the sale.
- Ended over six years ago and you do not have the paperwork: Do not start a reclaim. As lenders only have to keep records for six years, if no one has a record of the contract a reclaim is unlikely to be sucessful.
When NOT to reclaim
You won't be able to say the policy was mis-sold if you've ever received a payout from your insurance, i.e. money to cover your loan or card repayments. You may be able to cancel your policy though.
Only start the process if you definitely want your insurance to come to an end. Reclaiming almost certainly means that your insurance will be cancelled, as you are effectively saying it is not suitable to your needs.
PPI Isn't all bad - if it is managed correctly
Despite the feras about misselling, there is nothing wrong with PPI for those who need it.
The problem is it's far too expensive for what it is and it's sold in an appallingly and underhand manner, so many people have totally unsuitable policies.
The job of PPI is to cover loan or card repayments in case of accident, sickness or unemployment (or sometimes just accident and sickness). Nothing wrong with that, providing you're aware of the following four facts:
- The insurance cost isn't in the APR.
- If you get a loan with insurance the interest rate (APR) you pay is irrelevant: an 8.5% loan can be cheaper than a 7% loan, because the APR doesn't include the insurance cost, just the original loan amount.
- You may only be able to claim for one year.
- If you ever need to claim on your insurance, due to losing your job or being ill, many providers restrict each claim to 12 months no matter how long your agreement runs for. So if you claim one year into a five year loan you won't be covered for the final three years payments, even though you'll be paying for the insurance.
- Standalone insurance can be over 70% cheaper.
If you need insurance, it's possible to get similar cover at around a third of the cost, simply by buying a specialist insurance policy separate to the loan. For more details read either the Cheapest Loan Insurance or Cheap Credit Card Insurance
You may be able to cancel and switch expensive insurance.
If you already have a loan with insurance from the bank, you should be allowed to cancel it. Check if this is possible, then examine if you truly need the policy; if you do then you should save money by getting a standalone loan insurance policy and cancelling the existing one, meaning much less of your cash is paying enormous commissions.
The problem is it's far too expensive for what it is and it's sold in an appallingly and underhand manner, so many people have totally unsuitable policies.
The job of PPI is to cover loan or card repayments in case of accident, sickness or unemployment (or sometimes just accident and sickness). Nothing wrong with that, providing you're aware of the following four facts:
- The insurance cost isn't in the APR.
- If you get a loan with insurance the interest rate (APR) you pay is irrelevant: an 8.5% loan can be cheaper than a 7% loan, because the APR doesn't include the insurance cost, just the original loan amount.
- You may only be able to claim for one year.
- If you ever need to claim on your insurance, due to losing your job or being ill, many providers restrict each claim to 12 months no matter how long your agreement runs for. So if you claim one year into a five year loan you won't be covered for the final three years payments, even though you'll be paying for the insurance.
- Standalone insurance can be over 70% cheaper.
If you need insurance, it's possible to get similar cover at around a third of the cost, simply by buying a specialist insurance policy separate to the loan. For more details read either the Cheapest Loan Insurance or Cheap Credit Card Insurance
You may be able to cancel and switch expensive insurance.
If you already have a loan with insurance from the bank, you should be allowed to cancel it. Check if this is possible, then examine if you truly need the policy; if you do then you should save money by getting a standalone loan insurance policy and cancelling the existing one, meaning much less of your cash is paying enormous commissions.
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Feel ripped off by UK Banks? You've probably been missold a PPI policy - and you should claim it back - NOW! (more)
