If you have a credit card or store card, you may be able to reclaim £1,000s of PPI yourself, easily, for free. Don't hand 30% to a no-win no-fee claims handler. This step-by-step guide with free templates will let you join the millions of people who've successfully complained.
100,000s of people have been mis-sold policies by big lenders like Egg (reclaim via Barclaycard), Capital One, MBNA, NatWest, Lloyds and more. Many store card policies were also sold by shop staff with virtually no training. If that's you, it's time to get your money back.
In this guide
Had a loan? See the Reclaim PPI for Free guide
While every effort's been made to ensure this article's accuracy, it doesn't constitute legal advice tailored to your individual circumstances. If you act on it, you acknowledge that you do so at your own risk. We can't assume responsibility and don't accept liability for any damage or loss which may arise as a result of your reliance upon it.
Frequently asked questions
Many people are put off reclaiming because they've questions - and they're usually the same ones. To help, before we get into the step by step reclaiming guide - we've put together some of the most common to help you see the lay of the land. If you're interested in finding the right card for you, see the full credit cards section.
If your question isn't here, it may be in the main guide below. Remember, the general rule is, if you think you were mis-sold, give it a go. If the bank rejects you, that doesn't automatically mean you don't have a case - take it on to the free Ombudsman service.
Also, remember that sometimes add-ons that come with credit cards (especially free ones) can be really useful, see Credit Card Perks for more info.
The PPI basics: what is it, how was it mis-sold?
PPI stands for ‘Payment Protection Insurance’. It’s designed to cover credit card repayments for a year in the event of an accident, sickness or unemployment, or sometimes just accident and sickness.
Yet it’s been widely mis-sold, and you could even have it without knowing. If you were mis-sold PPI, you may be able to reclaim £1,000s. See the mis-selling checklist.
No. Payment Protection Insurance itself isn't a bad product. But it's been widely mis-sold with thousands of loans, credit and store cards, leaving many paying hundreds or thousands of pounds for potentially worthless cover.
If you’ve got credit card PPI, ask if you really need it. If you do, a standalone policy instead of the existing one should save cash, as less goes towards big commissions. You can get similar cover for about a third of the cost. See the Cheap PPI guide.
There's no specific start date. The problems of mis-selling have been around for a long time. Martin was warning about them back in 2000, and many others before that. Complaints can generally start on policies from the 1990s (possibly earlier). The financial regulator started fining PPI companies in 2006, but a big improvement wasn't seen until 2011.
No, you can complain about a product sold at any time though here are some guidelines which may help. It's easier if your insurance was active in the last six years but don't let this put you off.
Insurance started in the last six years: There's no issue here at all. Even if the loan's now paid off, you can start a reclaim.
Older insurance that's still active, or ended within the last six years: You can start a reclaim. The six year rule applies to active insurance, so a policy taken out 12 years ago but paid off five years ago was still active within the key six year period.
If your policy ended over six years ago: The ‘statue of limitations’ means banks don’t need to keep records that are over six years old. However, there is no official cut-off time so if you’ve still got the paperwork, while your chances of success are a little lower with older loans, many still do successfully reclaim.
Amounts can be enormous with credit card PPI. In fact, the biggest success we've ever had reported to us was an £82,000 reclaim. Though the key here is the more outstanding debt you had, the more you can likely reclaim as most cards charged roughly 80p per month per £100 of outstanding debt.
Many people get back £100s or £1,000s if they've had substantial balances. Plus you are often entitled to any interest you would've been charged on that portion of your credit card balance (so you're in the same position you would’ve been without the insurance), plus the 8% interest a court would give to compensate.
The provider should also consider correcting any further losses you’ve had as a result, such as any arrears charges due to taking the card. But if you’ve an outstanding debt to the lender, they can use the money to pay it off.
Estimating the size of your reclaim
The amount you've paid is different from product to product. Plus, the estimate's tricky as the amount you owe changes each month. Estimating is therefore far more of a 'guesstimate' – but you can get a rough idea from the chart below
|Rough average debt||Estimated insurance cost per year (10% of average debt)||How long you've had debt at this level||Estimated total insurance cost|
You can still make a complaint for mis-selling, though your chances of winning redress are likely to be much lower. Do use this as an opportunity to consider whether the insurance is still appropriate for you, or if you could get similar cover for less elswhere see the Cheap PPI guide.
Yes! If you got PPI with a card, it's likely you're paying MASSIVELY over the odds. Check if you can get the same for less elsewhere:
- Standalone cover can be half the price
Some bank PPI policies are so pricey that the max payout for a year may be less than the policy cost. It's possible to get similar credit card cover separately at about half the cost. See the Cheap PPI guide for info.
- Cancel & switch expensive insurance
If you've already got a credit card with PPI, it's normally a simple process to just cancel it. If so, getting a standalone policy and cancelling the existing one should save cash, as less will go on enormous commissions.
- Beware switching if you've a pre-existing condition
Most new policies won't include pre-existing conditions you have when a policy's taken out. If this applies, don't change it. For ways to switch, see the Cheap PPI guide.
Need to make several claims?
After you make a claim (which usually covers payments for a year), you'll need to wait a set amount of time before making another - even though you'll be paying for the insurance.
Reclaiming almost certainly means your insurance will be cancelled - you're effectively saying it isn't suitable for your needs. Only start the process if you definitely want your insurance to end.
We get asked this quite a lot, but there are fundamental problems with the question. Being mis-sold PPI doesn’t make you stupid. It often involved misinformation from trusted institutions.
Those who reclaim are only getting back cash that was wrongly taken from them. For more, see Martin’s blog: ’Wish I’d been stupid enough to get PPI'.
I don't have full details, what can I do?
The easiest way to check is to contact your lender. Most will be able to tell you whether you've had PPI, either now or at some point in the past. For example Nationwide has an enquiry form you can complete online to find out. See contact details for the main banks in the PPI reclaiming's getting easier MSE news story.
If this doesn't work, what's needed is likely to depend on how old your policy is. Some lenders only need a name and address (remember to let it know if yours has changed), others may need more details.
It may be easier if you have the original card agreement and terms. Under the Consumer Credit Act, if your account's still open you've a legal right to get your agreement from the lender for £1.
If your account’s closed and they can’t find your policy terms it'll be harder to process your complaint. Contact your provider with as much detail as you can, or request a full breakdown of your account. It can cost £10 to get this.
To help with getting copies of any documents use the template letters in step 1.
If your credit card provider says you didn't have PPI, as a backup you can ask who it used as its underwriter (the company that decides whether you're eligible for the insurance). You can then contact this organisation directly to see if a policy exists.
Once you have your paperwork, look for any mention of an insurance fee or product that will cover your payments in you lost your job through accident, sickness or unemployment.
It may be called 'payment cover', 'a protection plan', 'ASU', 'card protection', 'retail payment protection', 'card care' or similar. If unsure, ask the lender. If you find something on your paperwork you didn't know about, investigate.
Use our PPI questionnaire guide to take you through the Ombudsman form step by step. It's a Microsoft Word file so you can easily cut and paste sections, or have it next to you as you fill in the form. If you still have problems filling it in, call the Ombudsman on 0800 0234 567 (0300 1239 123 from a mobile).
In the first instance, you must send it to the card company. If it turns down your complaint, you can then send the same form to the Financial Ombudsman Service later.
If your card was from a mainstream lender, send your complaint to head office. Look on your statement for the address.
For store cards, contact the company that issued the card. It is responsible for ensuring staff were trained and customers received the right information about products. If you need to complain elsewhere, it'll let you know.
Mis-selling's often systemic - in other words, it was part of the standard sales or marketing pitch to sell incorrectly - so it's still worth trying. The lender has responsibility to give full details, so is expected to have more evidence. The bank may know it was likely all customers were mis-sold during a specific period.
If it won't settle it, make a complaint to the Financial Ombudsman Service. This independent service settles disputes between financial companies and their customers. It's completely free, and will decide if your reclaim should be paid.
If the account's still open, or has been in the last six years, there may be sale records. So if there's a chance you weren't fully informed, make a complaint. Many banks were involved in systemically mis-selling - in other words, they mis-sold as part of their process. If this applies, it's likely you'll win your case. See the mis-selling checklist.
Contact the company who provides the card - it may refer you to the debt collection agency if it has your files.
No. It's spam pure and simple. They don’t know you from Adam, but they put an amount in to make you think there’s some form of database they’ve secretly tapped into.
The fact you got this text is absolutely meaningless, it's done randomly. You may be owed PPI money, you may not. (As proof even Martin gets them regularly – and he’s definitely never had PPI). See more claims handler FAQs.
'Can I reclaim' queries
Yes. Insurance is usually added to your account based on the final monthly balance before repayments so you could have been paying for the insurance even if you cleared your account each month.
If in doubt contact your card provider to check.
You can complain about a product sold at any time though here are some guidelines which may help. It's easier if your insurance was active in the last six years but don't let this put you off.
Insurance started in the last six years: There's no issue here at all. Even if the loan's now paid off, you can start a reclaim.
Older insurance that's still active, or ended within the last six years: You can start a reclaim. The six year rule applies to active insurance, so a policy taken out 12 years ago but paid off five years ago was still active within the key six year period.
If your policy ended over six years ago: The ‘statue of limitations’ means banks don’t need to keep records that are over six years old. However, there is no official cut-off time so if you’ve still got the paperwork, while your chances of success are a little lower with older credit cards, many still do successfully reclaim.
No - this shouldn't happen. The Ombudsman ruled against closing accounts during the bank charges campaign, so it's no longer allowed. If you rely on your card and you want full protection, it may be worth opening an account with another provider before you start (see Credit Cards guides). Also remember to cancel unused credit cards.
No, it won't hit your Credit Rating and won't go on your credit file. At worst, in theory the lender you reclaim from could keep its own record, which may affect future applications to that specific lender. But we’ve not heard of this happening in practice.
Yes. You can reclaim for each policy you were sold, whether they're for loans, cards, overdrafts or mortgages or with the same or different banks. Just complete a separate form for each complaint.
Yes – you can reclaim PPI whether or not you’ve already reclaimed bank charges. Each PPI reclaim is separate, the fact you've done one before doesn't impact things.
Yes - though be aware any refunds may come off your balance (but it means you'll owe less if that happens).
Yes. What counts is the fact you were mis-sold when you got the policy, not whether you still have the card. The fact the debt's cleared doesn't mean you weren't mis-sold, so you can still reclaim. See the mis-selling checklist to find out.
Yes, your finances now aren't relevant to whether you were mis-sold or not.
It's worth being aware that if you have a debt to the lender, either on this account or from a debt in the past, it’s likely to use the cash towards your debt. It can do this without your permission but if it leaves you in financial hardship, tell the bank and it may change its offer.
This also applies to any policies purchased before a bankruptcy or insolvency order were made. Whether you've been discharged or not these 'assets' remain part of your estate so you are unlikely to get a refund. For more info read the Insolvency Service information about what happens to your claim if you are or have been insolvent.
An extra word of warning: if you’ve debt problems there’s usually no point using a claims handler. If your arrears are larger than your potential payout you’re unlikely to get the money, but you’ll still have to pay the claims handler fee.
You can still claim yourself using this guide to help then use the money to pay your lender what you owe it.
Yes, and be careful where you get your info from - its probably a load of nonsense. PPI companies should pay out if they’ve mis-sold.
You may have heard this because your company's one of the rare ones from before Jan 2005 which isn’t covered by the Ombudsman. If it's from a bank or building society, this doesn't affect you - reclaim away. But if from before this date, it may not be covered by the Ombudsman.
If so, the Ombudsman has no jurisdiction, so these cases can be harder to argue. But it doesn’t mean you won’t win; start the process and see how you get on. If you’re going to need to go to court, it's one of the rare cases where it may help to use a 'no win, no fee' claims handler. Use the Should I use a claims handler? tool to find out.
Yes. In buying another company, the new owners are usually liable for its debts and for paying customers. Sometimes the liability stays with the old provider, but complain to the new firm and it'll let you know if that’s the case.
As an example, Egg's credit cards have now been taken over by Barclaycard, so Barclaycard's liable for Egg's past PPI mis-selling.
Yes. If your lender's bust and you were mis-sold, you'll need to complain off the Financial Services Compensation Scheme (the lender must have been FSA/FCA-regulated for you to do this). This is the official body which insures the liabilities of finance companies are met. See Safe Savings for more info - the process is very similar.
Yes. Any monies owed become part of their estate, so the person who inherits is entitled to reclaim (let the executor know too). If there's no will this follows the rules of intestacy - see the HMRC website for more. It's worth noting there may be problems proving what happened at the time of the sale if only the policyholder was present.
There's actually no such thing as a joint credit card – instead there's one account holder, and possibly second cards with other people's names on. So, as you'd expect, only the account holder is actually covered by the PPI. If you were led to believe both partners were covered, see the mis-selling checklist.
Yes. If you were mis-sold PPI, the fact you now live abroad is neither here nor there - you were mis-sold and can reclaim. See the mis-selling checklist to find out.
You can reclaim from a company based anywhere in the world if it mis-sold you PPI, but the company needs to be UK-regulated to get help from the Ombudsman. Not all Jersey-based companies are UK-regulated, so ask the company or call the Ombudsman to check.
Yes. If you were mis-sold payment protection on them, you can reclaim. However, some non-bank policies from before 2005 weren’t regulated at the time, making it trickier. For all loans, see the full Loan PPI Reclaiming guide.
'Was I mis-sold' queries
Only if the PPI was mis-sold. The company you got it from had a duty to ensure the policy was appropriate for you. For example, if you were paying for unemployment cover but were self-employed when you got the PPI, it's likely it was inappropriate, meaning you may've been mis-sold. See the mis-selling checklist.
The company who sold you the insurance, which is usually the credit card company itself, or a store in the event of a store card has a duty to ensure the PPI was appropriate for you at the point of sale.
Many also lied by saying it was compulsory, or sometimes even added it without asking you, such as using a pre-ticked box for online applications. Use the full PPI mis-selling checklist to see if you were mis-sold.
It should look at whether the info you were given when you signed up meets the regulator's guidelines. These state the lender shouldn't have pressured you to buy, should have checked you were eligible, told you all the exclusions and price, and ensured the sale was fair.
This only applies to some people – those identified as being 'systemically mis-sold' (ie, mis-sold as part of the sales process). Yet there are many other types of mis-selling. While some banks have started to contact customers who may have been affected, others don’t seem to be anywhere near ready.
But don’t use this as a reason to wait - get your complaint started now.
If you were led to believe you had redundancy cover when this wasn't the case, you were mis-sold. See the mis-selling checklist.
No (well not for that reason anyway). The company had a responsibility to ensure the policy was appropriate at the time you took it out.
So the fact the policy isn't appropriate now isn't a reason it was mis-sold if it sold to you correctly at the point of sale.
However, if it sold unemployment cover when you were self-employed at the outset then it's likely it was mis-sold. And if you told the company you were changing to self-employed and it incorrectly said you were still covered you were almost definitely mis-sold. See the mis-selling checklist.
If you were mis-sold, eg, told you had to have PPI, you can complain. However, being encouraged to keep the cover as it may be useful (and all terms were explained) isn't a reason to reclaim. See the full mis-selling checklist.
Not for that reason, but the company should've ensured the policy was appropriate for you. So at the point you were paying for it, you could still have been mis-sold. See the mis-selling checklist to find out more.
Yes, being in the forces doesn’t change anything. The key is whether the policy was appropriate for you. Some policies may have excluded those in the forces from unemployment cover, so you’re more likely to have a case if this wasn’t explained.
Don't listen to claims companies who try and make your cases seem more difficult, and almost make it look like they're doing a favour to the forces - in fact they're charging you for something you can likely do yourself.
The Ombudsman, payments & more
Yes, yes, yes, yes and yes (I hope that's clear enough). You need to do it within six months of the rejection.
The banks are not the final arbiter here - the FREE Financial Ombudsman Service is. See Going To The Ombudsman Help. The majority of PPI cases that get to the Ombudsman are awarded in the consumer's favour. But to get there, the bank must have rejected your reclaim first.
So if the bank rejects you, just see it as a step in the process. Don't be disheartened, and don't believe everything it tells you about why you've been rejected. Take it on!
The Ombudsman can decide whether your policy was sold unfairly (see examples). It can only do this after eight weeks from your first complaint letter to the bank (between June-December 2011 this period was 12 weeks) UNLESS the lender itself suggests you go to the Ombudsman before that.
Complaints are time-barred from going to the Financial Ombudsman Service if it's over six months since rejection. But don't let that put you off. Before May 2011, when the banks lost in court, many people were tactically rejected.
Banks deliberately rejected cases knowing they'd win at the Ombudsman but most would never take it further.
If that happened to you, you just need to start a fresh complaint at the bank. Then if it rejects you again, you can go to the Ombudsman. Do note it won't necessarily look at them all - it's said it'll do this on a case-by-case basis.
This is a bit of a nightmare for some. Using the Ombudsman's simple, and the best way to go, but it takes far too long. PPI reclaiming numbers have exploded. While the Ombudsman's working hard to get it together, it may take a year or more to be settled. So don't bank on getting your reclaim (and payout) sorted quickly.
If you're in the midst of immediate, severe and provable financial hardship, let the Ombudsman know. It may be able to prioritise your case.
If you've been turned down by the Ombudsman and the evidence is the same, it's unlikely your case will be heard and unlikely the decision will change.
Sadly this is a common, frustrating problem. Firms say it should be within 28 days, but it could be 8-12 weeks. You'll get interest on the payout up to the date it's issued though, so that's a minor consolation.
If the delay's unreasonable, there's nothing to stop you contacting it to say you aren't happy, and asking for extra compensation for distress and inconvenience.
Yes. Banks call this 'setting off'. Most banks have the right to transfer cash from your bank or savings accounts to pay off other debts held with them, such as credit cards or loans.
Yet taking the money shouldn’t leave you in financial hardship. If it does, tell your bank and complain to the Ombudsman if you think you aren't being treated fairly. See the Setting Off guide for full info.
A goodwill payment’s an offer of a payout without the company admitting it did anything wrong. Companies rarely say they’re in the wrong - they simply offer some cash to stop your complaint going further.
If you don’t think it’s enough, you can negotiate for more. After this, if you don’t think it’s enough, you can still complain to the Ombudsman.
Probably not. One exception may be if you got the payment before May 2011 due to the new regulatory guidelines, but it isn't likely to be easy. Call your lender to check.
We think some lenders split payments into two parts, for example, when your account's still open and needs restructuring, the interest can be paid separately. If you’re not sure what you’ve received and why, contact your lender to ask.
We haven't heard of this happening, and neither has the Ombudsman - so ask for the full reason for the change, and complain to the Ombudsman if you aren’t happy.
Yes, but not on the actual cash back, only on the interest you receive as compensation. In brief, a payout's usually made up of three elements:
- A refund of what you paid
- A refund of any interest you paid on the premium
- Statutory (8%) interest based on the total amount you were owed
You only need to pay tax on this last element.
Let's say your payout, including any interest you paid, was £1,000 and you'd been owed this for three years. The 8% interest means you'd get £240 on top - so the total becomes £1,240. You'd pay tax on the £240 at 20% (basic taxpayer rate), so that's about £50. At the higher rate of 40% it'd be about £100.
The reason for this? It's assumed if you hadn't paid for PPI, you'd have kept the cash in the bank earning interest, which would be taxed.
Of the major banks, only RBS and NatWest automatically deduct tax for their current customers. Barclays (including Barclaycard), Halifax, HSBC, Lloyds TSB and Santander don't, so organise a payment by contacting your tax office, or call the income tax helpline on 0845 300 0627.
Some claims companies promise to wipe out pre-April 2007 debts by exploiting Consumer Credit Act loopholes. This was always dubious at best, but in December 2009 this was closed for good in court – so the short answer is 'No'. See the MSE News story: Debt write-off loophole closed.
There's a lot more information in the full step-by-step guide below. Yet if you've a particular question not answered there, try posting it in our PPI Reclaiming board in our forum. Someone there may be able to help (though do remember anyone can suggest an answer, so always double-check before relying on it).
If you need further help call your bank or alternatively the Ombudsman can answer questions on 08000 234 5679 (0300 1239 123 from a mobile).
Also see Claims Handler FAQs.
Had a loan? See the Reclaim PPI for Free guide
Get £1,000s back on mis-sold credit card PPI
The UK's biggest protection racket isn't run by thugs in back alleys, but the genteel staff of Britain's banks. For years they've been stealing £1,000s, but now you can get your money back.
We've won in court - paving the way for the millions that've been mis-sold to reclaim. Reclaiming yourself is easy, lets you keep the full amount - and it's completely FREE.
If you've a credit or store card, urgently check whether it included insurance. If it did, you could be paying £1,000s for potentially worthless cover - and you might not even know about it.
Since 2006, the financial regulator has fined PPI companies left, right and centre for "not treating customers fairly".
Then in August 2010, it set out a list of rules providers must follow to proactively find and compensate consumers that have been mis-sold a policy. In October 2010 the banking trade body, the British Bankers' Association (BBA), decided to take legal action against these plans and placed most cases on hold.
However, in April 2011 the High Court ruled in favour of mis-sold consumers, and the banks eventually accepted the verdict, gradually lifting the hold on complaints.
Additionally, the Competition Commission has investigated the market and made a number of demands on lenders. Some came into effect in October 2011, mainly the requirement for firms to give more information to the consumer, and some from April 2012, including the banning of PPI sales within a week of selling a credit card.
What's happened with complaints?
In Spring 2009 the Financial Ombudsman Service complained to the regulator that it thought lenders were "deliberately trying to obstruct the Ombudsman process" and that some lenders were rejecting ALL consumers' attempts to complain.
In September 2009, for the first time, it released details of company-by-company complaints data. Some big name lenders (Black Horse, Capital One, Egg, Lloyds TSB, Northern Rock, RBS, Barclays and MBNA) lost over 90% of insurance (primarily PPI) disputes at the Ombudsman.
Things have got a little better since. The overall average is now around 60% of complaints being upheld in favour of the consumer.
There are some 20 million PPI policies in the UK, previously generating a whopping £5 billion a year for the companies involved.
The insurance cost almost always dwarfs the interest, so many believe this is the most overpriced financial product around.
Worse still, in June 2008, after a 15 month investigation into PPI, the Competition Commission found the following average payouts:
- Car Insurance: 78%
- Home Insurance: 54%
- Mortgage PPI: 28%
- Personal Loan PPI: 15%
- Credit Card PPI: 11%
Put simply, this means ...
For every £100 insurers take on car insurance, they pay £78. On credit card PPI they pay out just £11, meaning it is HUGELY profitable.
Most of this profit goes to the lenders, not the insurance companies. The only silver lining? It means mis-selling cases are easier to win! See the success stories below for inspiration.
Some inspiration before you begin
If you've been mis-sold you CAN get the money back. Success stories have been flooding in from those who've easily reclaimed £1,000s. Here are a few for inspiration, see PPI Successes for more:
GE Money is refunding me £2000!!
Reclaiming PPI on a store card from House of Fraser / GE Money
I have been told I will be getting a total of £2024.49 back!!
Two letters to them, four back – no need to go to the Financial Ombudsman.
One credit card company has sent me a cheque today for £747.38, and another has offered me the full £238 and I'm just awaiting their cheque.
I had a Barclaycard for 28 years but never asked for PPI. After 16 months, £82,300 just appeared in my bank account. It's an incredible amount of money, which makes a big difference as I've been able to pay off family debts, do up my home and go on holiday.
How it may have been mis-sold?
How easy your reclaim is likely to be depends on how you signed up originally:
If you bought online...
Nowadays, many apply for credit cards online, by post, or by filling in a leaflet. If you signed up for your credit card on the internet, reclaiming's more difficult. The full terms are usually available there, and the onus was on you to have understood them.
But there's an important exception. If you signed up with a provider that was using pre-ticked boxes, you may have had to opt out of the insurance rather than opt in.
In July 2007, all lenders agreed to stop doing this, but if you took out a card before this date, check urgently – you may have bought insurance without knowing.
If you bought face-to-face or on the phone...
Here, the salesperson was responsible for ensuring you both understood the terms of any PPI and that the policy was appropriate. This also applies if you took out the policy online but were later called about the insurance, as often happened. This form of mis-selling has often been systematic, with staff being forced to sell policies or face lower pay.
You may've been told insurance was compulsory – it isn't, and that alone counts as mis-selling. Plus, the self-employed, unemployed, retired, those with pre-existing conditions, or who are covered elsewhere, have all commonly been flogged unnecessary policies.
So if you've got a case, write and complain. To reclaim, you'll need to write up to three times (templates for all of them are here); the last being to the free Ombudsman service, though there's a chance you could get a payout sooner.
As all of this is free, the worst case scenario by reclaiming is...
you lose the cost of three stamps.
Watch Martin's video guide
Recorded in February 2009 for loans, but most info applies to cards too. Small things may have changed. Always check the article for up-to-date info.
Also listen to the 24 min Radio 2 show.
Important! Don't miss PPI reclaiming updates Get MoneySavingExpert's free, spam-free weekly email full of guides & loopholes
If you think you may be a victim of PPI mis-selling, follow this step-by-step guide:
Step 1. Check your policy
Before starting, it's important to see if your complaint's valid. See the PPI Basics questions in the FAQ section.
The first step is find out whether you had insurance on your credit card account. Either write or phone the lender and ask.
Most big lenders will be able to tell you by phone whether you've had PPI, either now or at some point in the past. See contact details for the main banks in the PPI reclaiming's getting easier MSE news story or just try the main customer service number for the firm.
Want to see your paperwork?
While it isn't always necessary, as you can start a reclaim without it, if you don't have a copy of your agreement or T&Cs you can contact your lender to ask for a copy (make sure T&Cs date back to the time of your agreement as terms will change over time).
What to ask depends on whether you account is still open or is closed. There are template letters for both below to help.
Open account: Here lenders can ask for £1 to provide a copy of your agreement but not all do so you could include a £1 cheque (don't send cash, though) to speed it up a little.
Closed account: Here you can ask for a full breakdown of your whole account specifically including the insurance. If it takes longer than 40 days, report it to the Information Commissioner. This can cost £10 so you could include a £10 cheque (not cash).
Want to calculate how much you may be owed?
If you want to calculate the exact amount, you'll need to ask for a full breakdown, whether the account is open or closed. Though this isn't actually necessary, as if the company agrees the reclaim it should do it for you.
Step 2. The PPI mis-selling checklist
Now it's time to go through the checklist below. Sellers of PPI have a responsibility to ensure you understand the nature of the product, and that it's appropriate for you. All policies will have exclusions, and you should have been told about them. As most policies are bought alongside a financial product rather than on their own, the key issue is...
...what was said at the point you were sold the product.
Were you told it was compulsory?
It's a common complaint that consumers are told they must buy a policy from the same provider as the credit card in order to be accepted for the product. This is mis-selling.
Any company that subscribes to the Lending Code (see list) agrees it won't insist you buy an insurance product from it. Therefore if the salesperson:
- Didn't make it clear the policy was optional or tell you about any cooling off period
- Implied or stated it would be more expensive if you didn't take the insurance
- Implied or insisted you take out their policy to qualify for the product or help with your application
- Was very pushy when selling the product, so that you felt you could not say no
- Would not let you continue with the application if you did not sign the insurance agreement as well
then go to the how to reclaim section.
Didn't realise you had cover?
Have you just checked your credit card statements to find that you've been paying for insurance, but didn't realise until now that you had it, or what it's for?
Some old agreements (pre-July 2007), particularly store cards, may have used pre-ticked boxes so you had to opt out of the insurance rather than opt in, which is unfair. Always check this. If you're paying for insurance you didn't know you had, go to how to reclaim.
Were you told or sold the wrong thing?
This covers anything from the fact you were already covered through work or your partner, the policy not being what you agreed to, if you got store card cover in a shop and it wasn't explained, or if you thought it was a joint policy but in fact it was only in one person's name.
Does this apply to you? Expand the full general mis-selling briefing
Those selling PPI polices are obliged to tell you about the criteria of the policy and to confirm it's right for you. If you spoke to someone when applying for a card they need to consider your circumstances. Buying online places more reliance on you doing checks.
However, because PPI polices earn providers large profits, staff are often highly encouraged to sell as many as possible, and are well paid for doing so, meaning mis-selling is rife.
If you contacted a card provider by phone or in person, and if they didn't give you fair, correct and reasonable information, it's likely you were mis-sold.
Some common examples of PPI mis-selling
Did you sign up for the finance in a shop?
If you got a store card it was likely to be sold by someone with no financial background, meaning more room for error, and a whole catalogue of misinformation could have been given. If this happened to you, send a reclaim letter to check the insurance was sold in your best interests.
- Did you already have insurance cover?
If you had a separate income protection policy or your employer provided an illness and redundancy package and you either informed the salesperson you had this cover, they insisted you had to take their insurance, or you weren't asked if you had any alternative cover, go to how to reclaim.
- Do you have a joint card but the insurance is only in one name?
There's actually no such thing as a joint credit card – instead there's one account holder, and possibly second cards with other people's names on. So, as you'd expect, only the account holder is actually covered by the PPI. If you were told that secondary names were covered, go to how to reclaim.
- Were you told the total price?
Before you agreed to take the card the lender should have told you the full cost of the insurance so that you could tell it was affordable. So if you weren't given the costs in advance go to how to reclaim.
If you have an inappropriate PPI product and weren't told it was inappropriate, or you don't think you were given full information on what the policy would and wouldn't cover, get in touch asking for an explanation.
Self-employed, unemployed or retired?
If you were unemployed or retired, check if the policy included unemployment cover. If it did, the unemployment cover's worthless – this should've been pointed out.
If you were self-employed, check whether you were eligible for a payout if your business went bust (usually not) – if not, and it wasn't pointed out, you may have a case.
Does this apply to you? Expand the full mis-sold unemployment cover briefing
Have you been paying for a policy which includes unemployment? If you don't need unemployment cover, perhaps because you don't work or are self-employed, and mentioned this when you took out the policy, or were never asked about your employment status at all, a reclaim may be possible.
Is the policy suitable?
The unemployment element of PPI is only suitable for people who were working at the time they took out the policy, therefore you should have been asked about this at the time of application.
Example question: Are you in permanent employment, self-employment or contract employment for more than 16 hours a week?
Of course, if your policy only covers accident and sickness, with no unemployment element, this section doesn't apply to you.
What is classed as working?
Providers have different definitions, so it's important to examine your policy in detail. If you're self-employed, check whether your specific set-up is covered.
As the unemployment element is a substantial part of the insurance cost, many who are self-employed have been paying for a semi-useless policy – and this could've been a huge waste of money.
If you were unemployed at the start of the policy (this includes students and stay-at-home parents), you were almost definitely mis-sold the insurance as, obviously, you wouldn't be covered for losing your job. The same applies if you knew you were going to become redundant or retire when you purchased the policy.
If it isn't suitable, were you mis-sold?
Assuming the policy isn't suitable, you need to establish if the salesperson bothered to check. Remember, it's the situation you were in when you got the cover that counts. So if you were an employee then, but are now self-employed, that's not their fault – unless you've subsequently asked if it was still suitable and been mis-informed.
It's likely you were mis-sold if either:
- You made the salesperson aware of your situation and they suggested you get it anyway.
- You weren't asked about your employment status at all.
Age is an issue
Most polices have an upper age limit of 65 or 70, after which you're not covered. If you were older than this when you took out your policy, you were definitely mis-sold.
If you've passed the age limit since taking out the policy, your cover and therefore payments should have stopped. If they haven't for any reason, you'll at least be entitled to a refund of payments made since passing the age limit.
This situation's rare, as providers' records should flag up someone's age being too high from their date of birth, but do check.
What to do if you were mis-sold?
Read the other categories to check if you've more reasons to complain, then write a letter to your lender. Find full details and templates in the How to reclaim section.
Had any medical problems in the past?
Most policies exclude existing medical conditions, meaning you're unlikely to be covered for any medical problems you've had in the past. You should've been asked about this, and informed the policy could be affected.
Does this apply to you? Expand the full pre-existing medical conditions briefing
You should have been asked about health issues when you got your policy. If you not, or were never asked about your medical history, a reclaim may be possible.
Example question: Have you had any illness, accident or other treatment which resulted in you being off work for more than 14 days?
What is a pre-existing condition?
Each provider has its own rules, but most are strict. It may decide whether to pay an insurance claim based on what it considers to be reasonable for you to have known about before the policy started.
If you make an insurance claim on health grounds, insurers may ask for medical records or proof you didn't have the problem when you took out the policy, and will probably turn it down if you've had a similar medical problem before.
This is one of the biggest reasons insurance payouts are rejected. Providers often take a 'broad brush strokes' approach; for example, if you had a bad lower back, they may decide not to pay for other unrelated back problems.
Were you asked?
Salespeople are not obliged to have a detailed medical discussion, but if they didn't mention medical exclusions at all, the policy could be void.
If you've had medical problems in the past, this is not enough to make a reclaim. The key point is whether, at the time of application, you were told this was an important part of the policy and were asked to disclose any past health issues.
Some insurers provide medical cover if you've been symptom-free for a few years prior to taking out the policy, so check your own paperwork carefully. If this applies to your policy, you weren't mis-sold, so this section doesn't apply to you.
Other health related issues
As well as pre-existing health conditions, some general health problems are excluded from many polices, such as stress. Check the terms of your policy carefully to see if any conditions are not covered. If you weren't told about such exclusions, or were incorrectly informed when you asked about them, you may have been mis-sold
What to do if you were mis-sold
Read the other categories to check if there are also other reasons to complain, then write a letter to your lender. Find full details and templates in How to reclaim.
Has your provider already been fined?
The regulator has said it wants to see better practice. Many major providers, including GE Money, Egg (now the responsibility of Barclaycard) and Capital One have been fined for "not treating customers fairly". If yours has, it's very likely you've a case.
Does this apply to you? Expand the full list of fined providers
- Egg: Now the responsibility of Barclaycard, Egg was fined £721,000 in December 2008 for serious failings in its credit card PPI sales by telephone between January 2005 and December 2007. More info: Egg.
- Capital One: Fined £175,000 in February 2007 for failing to ensure 50,000 customers buying credit cards and loans between January 2005 and April 2006 received important information about the policy. More info: Capital One.
- GE Capital Bank Ltd (supplied cards for Asda, Comet, Debenhams, Topshop and more): Fined £610,000 in January 2007 for inappropriate sales of its store cards and credit cards. More info: GE Capital Bank Ltd.
Are you a customer of one of these firms?
If you're a customer of one of these companies it may have already been in touch. If it hasn't, you should send a reclaim letter asking for justification that your policy was sold with your best interests in mind.
Step 3. Contact your lender
Write or phone the company that sold the policy and ask for a refund. In the old days this often meant following a dance - thankfully it's much easier now.
It's sometimes possible to deal with your whole complaint by phone. Barclays' customers can also start a complaint via the PPI portal once logged into online baking. Find the contact details for the main banks in the PPI reclaiming's getting easier MSE news story. If it works, great. If not send a letter - see the templates below.
How to do it: complete a simple questionnaire
Fill in and sign a copy of the Financial Ombudsman questionnaire below. Complete as many of the questions as you can but don't worry if you don't know them all.
Include copies of any paperwork that backs up your case, and send the form by recorded delivery to your lender (keep a copy yourself). For help getting the details together, see the full details section of the FAQs.
To help, we've written a guide to take you through it step by step. It's written in Microsoft Word so you can easily cut and paste sections or have it next to you as you fill in the form. If you're still having problems, call the Ombudsman on 0800 0234 567 (0300 1239 123 from a mobile).
Step 4. Write to the Ombudsman
If you still haven't reached a satisfactory conclusion, it's time to make a formal complaint to the Financial Ombudsman Service. It's important to understand that if your bank didn't help...
This is the official independent service for settling disputes between financial companies and their customers. The Ombudsman is completely free to use, and will adjudicate on whether your complaint should be paid out.
It'll decide whether your policy was sold unfairly or unreasonably (see some examples). It can only do so once eight weeks have passed from the date of your first complaint letter, unless your bank sends a final letter within the eight week period.
While the process of using the Ombudsman is simple, and the amount of money you could receive is massive, it's not usually quick. Your case may take a couple of years to be settled, so don't count on the cash now.
How to make a complaint
Just contact the Ombudsman and ask it to take on your case. You can either do this via the Financial Ombudsman Service website or by calling 0800 0234 567 (or 0300 123 9123 from a mobile). It will look at each case individually, so if yours is a matter of you saying one thing happened but the company disagrees, the Ombudsman will decide if it thinks the company acted fairly.
As the party with responsibility to provide full details of the insurance, the lender is expected to have more evidence on what happened to back up its case.
In the last six months, of the cases that needed to go as far as the Ombudsman, 60% were awarded in consumers' favour. And even if yours isn't, there is no penalty for losing - it just means you don't get the money back.
Let it know your story
If you haven't already filled in the PPI questionnaire in Step 3, you'll need to do this now. Enclose copies of any paperwork that backs up your case.
Everyone also needs to fill in and sign a copy of the complaint form below:
Again, it's quite simple to fill in, though do take care. To help, we've written a guide which takes you through the form step by step. It's written in Microsoft Word so you can easily cut and paste sections or print it and have it next to you as you're filling in the Ombudsman's form.
The Ombudsman will then send you a confirmation letter to say it'll look into your case and get back to you if it needs any more information.
Sometimes this will take a long time, maybe even a couple of years as the Ombudsman deals with huge numbers of complaints. But don't worry - you can leave the matter to the Ombudsman to resolve and it will contact you with any offers from your card company.
If you think the Ombudsman wrongly turned you down
The Ombudsman's decision is usually made by an assigned adjudicator, but if you disagree with the result, you can ask for a formal decision to be made by one of the official ombudsmen at the service. This usually takes several months as it involves a detailed investigation into your case, but don't be afraid to push your complaint further if you think the initial decision isn't right.
After that, while the finance company must accept the Ombudsman's decision, you still have the right to take the company to court - see the 'Use a claims handling firm?' section below - if you don't agree with the result.
It's also worth noting that if you feel the Ombudsman hasn't handled your case correctly, eg, there have been unnecessary delays, you can ask for a senior manager to review it. If that doesn't resolve things you've a right to go to the Independent Assessor, though this is only about quality of service, not the actual decision made.
For other complaints the Ombudsman can help with, see the Your Financial Rights guide.
When won't the easy route work?
The Ombudsman can only help with complaints about regulated companies. All PPI sales from January 2005 are regulated by the Ombudsman, but some earlier policies aren't. Any provider that was FSA/FCA regulated before this will be covered by the Ombudsman. So all banks and building society credit cards should be fine.
Sadly, if you got PPI in 2004 or earlier and the provider wasn't FSA/FCA regulated the Ombudsman has no jurisdiction. Always call the Ombudsman and check first, though.
This makes reclaiming trickier, though it's still worth trying. Please share your experiences in the PPI Non-Ombudsman Reclaiming forum discussion.
Claims handler FAQs
It is illegal for UK companies to call any individual who has indicated they don't want sales calls.
If you don't want to receive marketing calls, join the Telephone Preference Service register. Once registered, it takes about 28 days for calls to be stopped, including live calls. See the Stop Cold Caller guide for full info.
For texts, there are two options you can follow. While they won't completely stop the spam, the more of us that do this, the less spam we're all likely to get in future.
Option 1 is to report the text to your network provider. The big networks have a simple, free method to help you do this. Just forward the message to 7726 (spells SPAM), making sure it includes the senders' number. Vodafone customers need to add an '8' and Three customers need to add a '3' to the beginning of this.
Option 2 is to report it to the Information Commissioner's Office (ICO). This helps them monitor bad practice and investigate firms or individuals who may've broken the law. See our Stop Spam Calls and Texts guide for ways to rport your spam.
Check the contract to see if you can get the fee back if you cancel. Some claims management firms (sadly, it doesn't apply to them all) say their commitment fee won't be more than £20, should be fully refunded, and there shouldn't be upfront fees.
You may be able to get a refund from your card company under Section 75 if it was over £100 (full info in the Section 75 guide). If so, it's likely this is your best bet - contact your card company.
Once you've signed it's very hard to get out of paying. You could complain of poor service but it's unlikely to be easy (see consumer rights). It's common to have to do some work yourself, eg, giving account details, but check the contract terms if you're unhappy with how much you've had to do.
This is one of the reasons we think it's best to avoid using a claims handler in the first place. If you feel you're being unfairly treated, let the company know and complain to the Claims Management Regulator.
No. There's no evidence whatsoever for that so you should avoid it as it's not an honest player. You can reclaim yourself, for free, without giving any of your payout to a claims company - just follow this guide.
Check what they tell you against our picking claims handlers checklist.
We don't normally believe in using claims handlers - they take usually take about 25% of the proceeds plus VAT and it's easy to do yourself. Many people give away £1,000s unnecessarily when they could keep all the reclaim cash themselves, and only need to send a quick letter or make a short call.
There are some circumstances where using a claims handler can work. Try our quick 'Should I use a claims handler?' tool first, as you may be able to do it for less. Reclaiming's easy, and we've free templates to help.
Plus read Martin's blog: Is it worth using a PPI claims company? – 10 things you need to know.
Going to use a claims handler anyway?
If you're considering this route, before doing anything else, use our quick 'Should you use a claims handler?' tool below, as the vast likelihood is you can do it cheaper yourself.
Should you use a claims handler?
Q1. Are you behind on payments on the loan or card that you're reclaiming PPI on? OR do you owe the same lender any money for other debts?
If you're intent on using a claims handler regardless, then it's imperative you do the right checks. Use our 'What to check when picking claims handlers checklist'.
Possible alternative: Use a lawyer to take it to court yourself
An alternative is to find yourself a local lawyer willing to take the case on, or a no-win no-fee legal firm (some claims handlers link with or use them).
After all, from this point on it's likely to get litigious, so a lawyer should help. In fact, a legal letter may make a company with a flimsy argument settle quite easily.
Yet if you are going to hire a lawyer, ensure you discuss the fees beforehand and compare it to the maximum you can reclaim.
Taking court action
If you've tried a reclaim through a trade organisation and it won't help, there's always the option of taking court action against the PPI provider via the small claims system. The complaint is generally on the grounds that it's misrepresented your contract (and therefore made it invalid) if it didn't give you the full facts about the product or ask for all the required information.
This can actually be quicker than using the Ombudsman but will involve costs, eg, £50 for smaller amounts, up to £300ish for larger reclaims - although you will get these back if you win - and there's always the risk you'll have to argue it in court.
If you have good grounds, and understand the legal arguments, then do consider it. There's a good chance it will force the PPI company to settle, but there are no guarantees.
For further details on how to take county court action see the taking court action section of the How To Complain guide. If you give it a try, please let us know how you've got on in the successes and failures forum thread.
Please tell us your experiences!
Things will continue to develop over time. Please let us know how you get on so that we can keep our article up to date and help as many people as possible by reporting your PPI successes and failures in our forum - all stories are useful for other MoneySavers.