Cutting your costs, fighting your corner
For immediate release 2 March 2017
The FCA has announced an August 2019 deadline for consumers to reclaim mis-sold PPI. Campaigner Martin Lewis is the founder of MoneySavingExpert.com, which has had over 6.5 million free PPI reclaiming templates letters downloaded (it’s estimated these have resulted in up to £5bn being paid back) and now has a FREE TOOL to help PPI reclaims. His comments.
On the deadline: “PPI has been the biggest financial scam of all time – over £20 billion 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 alleys, but by bankers in pin stripes.
“The deadline is a mistake. The stats are plain. Flabbergastingly, in over half (54% in the last 12 months) of all cases where after the bank rejects a PPI reclaim people take it to the independent Ombudsman, the bank’s rejection is overturned. Until we can trust banks to deal with complaints fairly in the first instance, this move to protect their balance sheets should not happen. It is putting the protection of the financial industry ahead of consumers.
“Worse still, many banks make it outrageously hard for people to find out if they ever had PPI. In meetings with the head of the FCA, we pushed hard to ensure that was changed if it imposed this deadline. I can’t see anything has changed. Let’s hope it’ll do this behind the scenes.”
On Plevin: “The rules are now pretty simple. If you had PPI and the commission was over 50% and that wasn’t explained to you, then you are due back any commission above that plus interest. As bank loans with PPI typically had 67% and banks almost never mentioned it, this means millions more people are owed billions more pounds.
“The FCA will rightly force lenders to write to the 1.2 million whose past PPI reclaims have been rejected, but who may be owed due to Plevin. Yet it should’ve done the same for everyone whose commission was over 50% - not just those who've already complained. That’s what’s needed here - after all, it has unjustly imposed the same deadline on the brand-new Plevin ruling as for other PPI issues.
“Instead, consumers must take action themselves. Quite simply everyone who has had a loan, credit card, overdraft, mortgages, store card or any other debt should check now if they had PPI and what the commission level was.
“This ruling of course has a further worry. The fact it may push up commission elsewhere if firms start to think ‘aye aye, they won’t have a go as long as our commission is under 50%!’”
On what people should do: "This is an urgent clarion call to consumers. PPI was systemically mis-sold on loans, credit and store cards, and commonly mis-sold on mortgages and overdrafts. If you’ve had one of those in the last 20 years, check if you’ve got the paperwork, and if so if it had PPI on it. And ensure you reclaim for free - there’s lots of help out there, you don’t need to pay someone.
“Do this ASAP - the regulator is due to push big money into publicising the deadline, which will likely jam up the reclaiming system, so doing it now gets you ahead of the queue.
"Plus if you have already made a past PPI complaint that was rejected by the bank but you did not go to the Ombudsman, try to restart your complaint now. Banks have been fined for poor complaints handling – your bank rejection does not mean you weren't mis-sold.”
On vulnerable consumers: “We must ensure it isn’t just those ‘who can’ that get their money back. A good proportion of those due PPI reclaims who haven’t done it yet are likely to be vulnerable consumers – those with mental capacity problems, mental illness, literacy issues and more. In meetings with the FCA about this deadline we pushed hard that some of the communications budget should be used to help those consumers.
“I’m pleased it has factored this in to an extent. If consumers contact the FCA helpline (it starts in August 2017), if its staff feel they need face-to-face support, it will now be able to do that. However sadly the deadline still applies here and relies on people to get in touch with the FCA, which will leave many missing out. Charities and others will be forced to pick up the slack.”
On spam PPI calls: “This is likely to see a big boost in spam calls and a blast of advertising on social media as claims firms try and take advantage before the deadline ends. While many will be happy to see the PPI deadline to see the end of the more parasitical end of the claims sector, ultimately what matters is ensuring people who were missold in this scandal get justice.”
MoneySavingExpert.com’s 5 quick reclaim PPI for free tips
Attribute to either MoneySavingExpert.com or Martin Lewis, founder of MoneySavingExpert.com
Speed is of the essence, as the PPI reclaiming system is likely to get jammed up after August once the huge marketing campaign about the PPI deadline is put in place. So reclaim now to get ahead of the queue. Full help and a free tool to reclaim is at www.moneysavingexpert.com/PPI. Here are the five key steps…
Step 1: Find the paperwork. There’s no time limit on PPI reclaiming - you can go back as long as you like, providing you’ve evidence. Check back loans, credit cards, mortgages, store cards and overdrafts to see if there was PPI. It will have been called something 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. If you can’t remember who your lender was, check your credit file, which you can do for free.
Step 2: Were you mis-sold? Typical examples include if 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 – it may not have been if, for example, you were self-employed but got unemployment cover, or you had a past medical condition they didn’t ask about. And now too the simple fact the commission on the PPI was over 50% (which it usually was) and you weren’t told counts as mis-selling.
Step 3: Do it yourself for free. This needs shouting from the rooftops. You do NOT need to pay to reclaim - no way, absolutely not, never!Companies known as claims handlers do very little for you that you can’t do yourself, and they take 30% of your pay out – which is often many £1,000s. To do it easily there’s a free reclaiming tool at www.mse.me/PPI.
Step 4: Expect a rejection. Sometimes the banks, building societies or other lenders say ‘fair cop’ and pay out thousands in days. Yet equally they often say no too. That doesn’t necessarily mean you don’t have a case, just that it’s the lender trying to put you off. If you believe you were mis-sold, just see this as part of the dance because the real decision comes at the next stage.
Step 5: Go to the free Financial Ombudsman Service. If you’re rejected, you have 6 months to take your case to the Financial Ombudsman Service, an independent body which can adjudicate and force banks to pay you back. To make it easier, the reclaim tool above does this for you. If you’re struggling or unsure, the Ombudsman has a helpline - call 0300 123 9123.
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About MoneySavingExpert.com: MoneySavingExpert.com is dedicated to cutting consumers’ bills and fighting their corner. The free-to-use consumer finance help resource aims to show people how to save money on anything and everything, and campaigns for financial justice. Set up in 2003 for just £100, its free-to-use, ethical stance quickly made it the UK’s biggest independent money website, according to internet ranking site Alexa.com, and the number one ‘Business and Finance – Business Information’ site, according to Hitwise. It has more than 12 million people opted-in to receive the weekly Martin’s Money Tips email, and more than 15 million unique monthly site users who visit more than 26 million times a month. In September 2012, it joined the MoneySupermarket.com Group PLC.
About Martin Lewis: Martin Lewis OBE, Money Saving Expert, is the journalist and consumer campaigner who created MoneySavingExpert.com, the UK’s biggest money website. He’s the UK’s most internet-searched man, Citizens Advice’s Consumer Champion of the Year, and has spearheaded major financial justice campaigns including bank charges reclaiming (over six million template letters downloaded) and PPI reclaiming (over five million) and a successful large-scale campaign to get financial education in schools. He has his own prime-time ITV programme, The Martin Lewis Money Show, as well as regular slots as resident expert on Good Morning Britain, This Morning and Radio 5 Live, among others. He was appointed OBE in the Queen’s Birthday Honours in June 2014.