If you were mis-sold PPI you might have paid or still be paying for a policy you do not need or can not claim on. But you may be able to claim back money spent on mis-sold PPI following five simple steps.
Step 1: See if you have a policy
Check the paperwork for your loan as the cost of PPI may be included on your statements.
If it is not listed as ‘payment protection insurance’ it may be called loan protection, credit insurance, loan repayment insurance, ASU (accident, sickness and unemployment) insurance, account cover or payment cover.
If you are still not sure whether you have PPI ask the firm or bank that sold you a loan, mortgage, credit card or other similar product.
Step 2: Check if PPI was mis-sold
Some reasons why you may have been mis-sold PPI include:
- you were pressured into taking out PPI;
- it was not made clear that PPI was optional;
- you were advised to take out PPI but it was not suitable for you;
- you thought buying PPI was a condition, or would increase your chances, of obtaining a loan or other type of credit;
- any significant exclusions were not explained, such as being self-employed or pre-existing medical conditions;
- the policy was added to your loan without your knowledge;
- it was not made clear that you would pay interest on the cost of PPI if it was added to the loan; and
- it was not made clear that the PPI cover would end before the loan or credit was repaid.
Note: There are other reasons why PPI may have been mis-sold. If you are not sure whether your policy was mis-sold you should contact the Financial Ombudsman Service.
Step 3: Make the claim yourself
There are many companies that offer to submit claims for mis-sold PPI, usually known as claim handlers, claims firms or claims management companies (CMCs).
But making a claim for mis-sold PPI is a free, straightforward process that you can do yourself.
If you do decide to use a claim handler you should carefully consider whether to pay an upfront fee before your complaint is submitted, as there is no guarantee it will be successful and you could be left out of pocket.
While the ‘no win, no fee’ approach often advertised might be more appealing than paying money up front, it can mean paying a significant portion of your refund to a claim handler.
PPI claim handlers often keep as much as 30% of a refund, so if you receive a £5,000 refund you would have to pay £1,500 of it to a claim handler.
The Financial Ombudsman Service (FOS) has a free PPI claim form (doc) that you can use instead. If you make a claim yourself, you will receive all of any refund you are entitled to. Call the FOS on 0800 023 4567 if you need help filling it in.
Step 4: Complain to your lender
If you think your PPI was mis-sold or is not suitable to your circumstances you should first complain to the firm or bank that sold you the policy.
It is best to write to them providing as much information as you can about the policy you are complaining about and be clear about why you think the policy was mis-sold.
You can use one of the many free template letters that are available, or the FOS’s free PPI claim form (doc), to ensure you provide the information the firm or bank that sold you PPI need to assess your claim.
The firm or bank has eight weeks to respond, telling you whether your complaint has been successful or why it needs more time to look into it. Some firms will respond just to let you know they have received your complaint, so be sure you have a final response or it has been eight weeks since you complained before you contact the FOS, as in Step 5.
If your loan was arranged by a firm that is no longer trading, but you think it may have mis-sold you PPI, you should contact the Financial Services Compensation Scheme (FSCS) to find out how to make a claim. Making a claim to the FSCS is a free process you can do yourself.
Step 5: Contact the Financial Ombudsman Service
If you do not get a final response from the firm or bank within eight weeks of your complaint, or you are not happy with their decision, the Financial Ombudsman Service (FOS) may be able to help.
You can send the FOS’s free PPI claim form (doc) to them even if you already used it to complain to the firm or bank that sold you PPI. Call the FOS on 0800 023 4567 if you need help filling it in.
It is important that you contact the FOS within six months of receiving a final response from the firm, or the FOS may not be able to deal with your complaint.
The FOS will ask the firm or bank to explain what they think happened and then decide whether to uphold your complaint.