Check if you're due a PPI refund - before it's too late

It’s the UK’s biggest financial scandal of all time, yet last week the financial regulator announced it was going to put a lid on PPI reclaiming, imposing a deadline.

Our Money Saving Expert Martin Lewis, who’s been at the centre of PPI reclaiming, with over 6.5m of his free template letters downloaded, says within that announcement was another rule, that opens the door for possibly millions more people to get money back.

PPI has been the UK’s biggest financial scandal of all time – over twenty thousand million pounds repaid so far, and it wouldn’t be surprising if it hit £30 billion before it ends. Yet it wasn’t done by dodgy blokes in back alley’s, but by bankers in pin stripe.

For full information on how to reclaim see Martin’s full ‘Reclaim PPI for free guide & tool’ guide or alternatively Which?’s PPI info. Yet here’s a quick briefing…

Back to basics – what is PPI?

PPI stands for ‘payment protection insurance’ an insurance policy sold to cover a year’s repayments on debts in case of accident, sickness or unemployment, and the concept is a decent one.

Yet for years banks saw it as a cash cow, and pushed their sales, systematically misselling this insurance – which often made them more profit than the loan itself. It was given to people who didn’t need it, couldn’t use it, they lied about the fact it was compulsory and it was even added to some people’s loans after they’d said no to it.

Reclaiming means you get back all the money you wrongly paid it. I continuously hear of success stories like Liz who emailed me “After your information on the mis-selling of PPI I have received confirmation from them that I was mis-sold PPI to the tune of £10,370 and they will refund this to me.”

What is the deadline?

Last Thursday the regulator, the FCA said the last day you will be able to put in a claim for PPI misselling is 29 August 2019. While that sounds a long time away, the key point is that the FCA will soon spend millions promoting it, so the system is likely to get clogged up, therefore go quickly to avoid being stuck at the back of the queue.

So everyone who’s got or has ever had a loan, credit or store card where it was systemically missold, but also mortgages, catalogue or overdrafts should be checking now if they had PPI.

This deadline is something I’ve objected to – I don’t think it’s in consumers interest, nor do other consumer groups. The original suggestion came from the big banks as they wanted to protect their balance sheets. Yet its happening.

What counts as misselling?

Typical examples include they lied that PPI was compulsory or it’d cut your loan costs; sometimes it was added without asking, or even after you’d said no.

They had a duty to ensure it was suitable for you. For example, you were self-employed but got unemployment cover or you had a past medical condition they didn’t ask about.

You said millions more people may now have been missold this?

In the deadline ruling, the regulator also clarified info on a recent court ruling called ‘Plevin’. It says that if your PPI was made up of more than 50% commission and you weren’t told it then you are due the extra back plus interest. As the average commission was 67% and banks almost never mentioned it, this pretty much means almost everyone who had PPI is likely to be due something back. This new rule comes into force on 29 August this year.

So much so lenders will be forced to write to 1.2 million people who were previously rejected and may now be owed due to Plevin. Though ridiculously it’s not ordered them to send these letters to everyone whose commission was over 50% - only those who've already complained – so you’ll need to do it yourself.

How do I know if I had PPI?Don’t assume you didn’t. One way it was mis-sold was to add it without asking, or even adding it after you’d said no. Like Clairebee who tweeted“

- Check your old loans paperwork: It may have been called PPI or like “payment insurance” or “accident or sickness” insurance”.

If you don’t have your paperwork, you can request it from your lender going back up to six years.

- What if I can’t remember my lender? Check your credit report from Experian, Equifax and Call Credit (now possible to get free online) which shows all lending active within the last six years.

- What if I haven’t got paperwork? If you haven’t got your paperwork you can ask the lender for it (going back six years). If it refuses you can force it to give it to you under the data protection act.

- How far back can you go? There’s no rule on how far back you can go. Eg Daz tweeted me “@MartinSLewis received PPI refund of £2,500 on a loan I had forgot about from about 20 years ago.” Yet if you can’t get the paperwork for old PPI there’s little you can do

How do I reclaim? There’s no need to pay a claims management company to do this. You can do it easily yourself using free template letters and online tools or even just calling your bank.

If the bank rejects you, and you feel you were mis-sold then don’t give up. You’ve a right to go to the free Financial Ombudsman service within six months – it will adjudicate independently. Over 50% of people who get rejected by their bank get ruled in favour by the Ombudsman – that’s where real justice often lies.

If I was rejected before what can I do? If you’ve claimed over six months ago, you may be able to restart your complaint with the Bank. But you’ll need a good reason to restart it, though Plevin is one. So try again using that. If you need help you can call the Ombudsman on 03001239123 and it’ll help you.