How to claim for mis-sold payment protection insurance (PPI)

Money Advice Service

Payment protection insurance (PPI) has been mis-sold to millions of people, but the good news is you can claim compensation. If you think you’ve been mis-sold PPI, use this guide to find out how to make a PPI claim and why you shouldn’t use a claims management company. It also contains a PPI claim letter template.

What is payment protection insurance?

Be aware

You have until 29 August 2019 to complain about the sale of PPI.

Find more information about this and how to claim on the FCA website.

Payment protection insurance (PPI) is commonly sold alongside other financial products such as credit cards, store cards, mortgages and different types of loans.

It is designed to cover the payments in case of illness, accident, redundancy or death.

What PPI compensation you could reclaim

The average customer payout for loan PPI compensation is around £2,000.

How do I know if I’ve been mis-sold PPI?

Not sure what something means? Have a look at our Protection insurance glossary.

Have you ever had a mortgage, credit card or loan? If so, you may have been mis-sold PPI.

Previously, PPI was sold when you took out a loan, credit card, mortgage or car finance deal. The idea was that PPI would cover the monthly payments on your credit agreement if you became ill or lost your job.

However, sales staff often didn’t explain policies properly and they were often sold to people who weren’t eligible for cover. For example, to people who were self-employed or with pre-existing medical conditions. As a result, many policies didn’t pay out when people needed them to.

A more recent guideline for mis-selling is about commission lenders received on PPIs. If more than 50% of the commission of your PPI went to the lender and you weren’t told about it, you also might be owed compensation.

If you remember having a similar conversation but not told the correct details, there’s a chance you were mis-sold PPI and can claim.

What if I don’t remember being sold PPI

There’s a chance you were sold PPI without realising it. In some cases, salespeople didn’t explain PPI policies when they were sold.

Or they may have said you had to take out PPI, or that you had a better chance of getting a loan if you took it out. If this happened to you, odds are you were mis-sold PPI.

It’s worth checking any mortgage, credit card and loan agreements. If you see any of the following terms in the documents or similar, you’ve probably been sold PPI:

  • payment cover
  • protection plan
  • loan protection
  • ASU
  • loan care.

Even if you can’t find the documents, it’s still worth claiming if you think you were mis-sold PPI.

How to claim PPI

A claims management company will take a quarter of your PPI compensation or more – there is no need to use one.

  1. Find all the relevant documents and make copies. This includes anything that shows you’ve taken out a policy and shows you making payments for it. If you’re not sure whether it’s relevant, copy it.
  2. Write a letter to the mortgage, loan or credit card provider who sold you the PPI. It shouldn’t take too long to do if you use the Money Advice Service PPI complaints template letter or you can fill in the questionnaire which most of the banks have on their own websites. It’s a standard form that is also used by the Financial Ombudsman Service. Send all the documents you think might be relevant. Explain why you think you were mis-sold PPI.
  3. If you don’t get a response or decision within eight weeks, send a complaint to the Financial Ombudsman Service (FOS). The Ombudsman will ask you to fill out a questionnaire to decide whether or not you’ve been mis-sold PPI.
Find out more about claiming for mis-sold PPI and the 29 August 2019 deadline on the FCA website.

Learn how to complain on the Financial Ombudsman Service website.

Don’t use claims management companies

Claims management companies will offer to help you with your claim. You might have seen their adverts, or even received texts or phone calls from them.

Don’t use them.

Making a claim is straightforward. Just follow the steps listed above and use the template provided.

Why avoid them

A claims management company will typically take a quarter of your compensation or more. They might also try to charge you an upfront fee, and some companies have gone bust, without doing any work to reclaim customers’ money.

Some claims management companies say banks process their claims more quickly, but this isn’t true. You won’t lose out if you make the claim yourself. In fact, you’ll end up with more money.

How to complain about a claims management company

On 1 April 2019, the FCA took over the regulation of claims management companies (CMCs) from the Claims Management Regulator. Not all CMCs transferred to FCA regulation – some CMCs chose to stop managing claims instead.

If a CMC is currently handling a claim for you, but opted not to be regulated by the FCA, they may have contacted you to explain how to continue your claim.

If you are unhappy with the service you have received from a claim’s management company, you can now complain directly to the Financial Ombudsman Service.

This article is provided by the Money Advice Service.

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Some important information about Rest Less Money

We want you to understand the positives, but also the limitations of using our site. We operate in a journalistic manner and therefore all information, guidance or suggestions provided are intended to be general in nature, and you should not rely on any of the information on the site in connection with the making of any financial decision.

When we set out to build Rest Less Money, we wanted to be a trusted place where you could find helpful information about financial matters affecting the over 50s. As a free to use resource, we try hard to provide the best information we can, but we cannot guarantee that we won’t occasionally make mistakes. So please note that you use the information on our site at your own risk, and we can’t accept liability if things go wrong.

Key things to remember when using Rest Less Money:

We do not offer financial advice – As a journalistic site, it’s important to know that we do not provide financial advice. You should always do your own research before choosing any financial product so that you can be certain it is right for you and your specific circumstances. If you are in any doubt, please seek professional financial advice from a regulated financial advisor.

No Liability – please note that you use the information on Rest Less Money at your own risk and we can’t accept liability for how you choose to use the information given on our site. We will often provide links to content or products and services available on other third-party websites. These are provided purely for your convenience and we cannot be held responsible for any content, or any of the products and services offered on any website that we link to.

 

Accuracy of Information – We try to make sure that all the information provided on Rest Less Money is correct at the time of publishing as we want it to be the most helpful resource possible. Sadly, we are not perfect however, and so we can make no guarantees as to the completeness, accuracy, adequacy or suitability of the information available on the site.
Whilst we work hard to try and provide accurate information, deals and prices can change, so whilst they may be correct at the time of writing, providers may subsequently decide to alter them later – so always double check first.

A final note on the Rest Less Community Forums – always remember that anyone can post their opinion on the Rest Less Community Forums, so it can be very different from our own opinion and may not be factual or well researched. Always be wary of any content posted on the forums and be sure to do your own research and due diligence on anything suggested. 

We hope you find Rest Less Money a useful resource and we would welcome your feedback at [email protected] on how to make it even better. For more information on any of the above you can read our full terms and conditions.

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