PPI: Can I still reclaim?
The reclaim deadline has now passed, but there may be some exceptions
The PPI deadline passed on 29 August 2019, so most people can no longer reclaim, be that direct to a bank, using our free reclaim tool, or via a claims firm. For a handful, exceptional circumstances might mean it's still possible, but for the majority, the door is firmly shut. However, many can still claim £100s in tax deducted from payouts.
We explain below what options are left – while below that, we've kept the majority of our original PPI guide to explain what it was and how it was mis-sold.
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PPI reclaiming: The 10 need-to-knows
PPI was an insurance policy sold (or forced upon you) when you got a loan, credit or store card, catalogue account, overdraft or car finance
Payment protection insurance (commonly referred to as PPI) was designed to cover your loan or credit card repayments for a year in the event of an accident, sickness or, in some cases, unemployment. About 64 million policies were sold, mainly between 1990 and 2010.
In itself, PPI isn't a bad product. But it's been widely mis-sold and now, because of a ruling called Plevin (see below), even just having had it means you're likely due some cash back.
The original mis-selling left many paying thousands for potentially worthless cover – and you could even have it without knowing (see the mis-selling checklist, which includes Plevin too). A major problem was that sales staff were hugely incentivised to sell PPI whenever possible.
Many were under so much pressure, they strayed far from the truth. The sellers were often trusted financial institutions, so sadly, many were left with mis-sold PPI. The mis-selling's scale has meant that many have no idea how much they're owed – and are often staggered by the sums, often £1,000s, they get back.
Mike Weaver founded a radio and communications business in 1991. But when he took out multiple large loans – ranging from £40,000 and £80,000 – he was told PPI had to be added. After complaining about being mis-sold, Mike received a payout of £247,000 – the biggest sum reported to MSE yet.
We'd had some big business loans, these were going back to the early 2000s and maybe 1990s, and we'd been told you don't get the loans without the PPI. I've got very little paperwork, but I filled in their online claims form as best as I could – mainly just putting in our business account details. I was going to borrow more money for some contracts, but I won't need to now. We're going to have a party and I've given all the staff a bonus too!
We had another cracker in May, when one couple got in touch to tell us about their whopping PPI claim. Bob and Jane, from Swindon, claimed for mis-sold PPI on a number of credit cards and loans, getting back a total of £175,000.
We originally thought about applying but didn't. Then we read all the information on MSE and gave it a go. The banks made it difficult but we kept on going and succeeded in getting £175,000. Getting this money has given us peace of mind as we can look forward to retirement debt-free.
- Bob and Jane
If you've never tried before and don't think this affects you, you're possibly wrong. One of the ways PPI was mis-sold was by being added without you being told.
Take this case study from John for inspiration...
I took your advice and have claimed PPI from all the companies we had loans with. The result has been overwhelming: approximately £19,000 back... thank you.
If you've had a huge success after using this guide, we want to hear from you. Share your experiences in the PPI forum discussion.
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 others before that. Claims can generally be made on policies going back to the 1990s (possibly earlier). The financial regulator started fining PPI companies in 2006, but a big improvement wasn't seen until 2011.
There were some 20 million PPI policies in the UK by May 2008, 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%
Simply put, this means...
For every £100 insurers take on car insurance, they pay £78. On loan PPI they pay out just £15, meaning it's 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!
Because what the banks did was wrong. Since 2006, the financial regulator the Financial Services Authority (FSA), which became the Financial Conduct Authority, has fined PPI companies left, right and centre for "not treating customers fairly".
Then in August 2010, the FSA finally decided the whole industry needed to tidy up its game and so set out a list of rules providers must follow to proactively find and compensate consumers who were mis-sold a policy.
In October 2010, the banking trade body the British Bankers' Association decided to take legal action against these plans and unfairly placed most cases on hold.
But 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.
Since December 2016, when MSE launched its free tool to make PPI reclaims, powered by complaints site Resolver, users have clawed back an estimated total payout of £500 million. From May 2018 when Resolver started to record reported payouts to MSE users, £11.4 million has been clocked up, with the average refund per claim being £1,100.
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Have you been Plevined? A recent ruling means just having had PPI means most were mis-sold
'Plevin' is a mis-selling category of PPI. It essentially means that if you got PPI with a loan or credit card from a bank or building society, you were mis-sold.
For years, we've been shouting: "Have you been mis-sold PPI?" But now – with this rule – we're yelling: "Have you simply had PPI?" Even if you knew what you were doing, it's likely you were mis-sold it.
'Plevin' has opened up a new claiming route for millions of people who didn't think they had been mis-sold PPI, or who have had claims rejected. The PPI will have to have been active after April 2008, though there can be exceptions.
So who or what is Plevin? Well, in 2014 a court ruling held that customer Susan Plevin had been treated unfairly because she wasn't told about the large amount of commission (71.8%) taken from her PPI payment.
The Plevin rule means if more than 50% of your PPI's cost went as commission to the lender (or the lender and the broker/adviser together), and that wasn't explained to you, you are due back the extra above that. It is for the lender to pay you this and it doesn't matter if you paid for your PPI as one lump sum or monthly.
Staggeringly, with loan PPI, on average 67% of what you paid was pocketed by banks as commission from insurers, and banks almost never mentioned it – so millions more people are owed possibly billions more pounds. On a £10,000 loan over five years, your Plevin compensation would typically be in the £500 ballpark.
New PPI claims are normally automatically checked for Plevin
Following the Plevin case, new rules on commission came into force on 29 August 2017, so any PPI claims since then should have been automatically checked for Plevin eligibility as well.
If you've previously been rejected, you're likely still due a Plevin payout
Plevin could work for you if you've had a claim rejected from a bank, building society or other big financial institution (even if the ombudsman agreed with the rejection). There were 1.2 million whose claims had been turned down (as of 29 August 2017) who were then eligible under Plevin. If you were one of these, you should have been notified of this by your bank by now, but if not, claim anyway.
In February 2019, the Financial Conduct Authority (FCA) also ordered firms to contact around 150,000 rejected claimants whose policies were active before April 2007 to inform them they can now make a new complaint.
You can complain about PPI mis-selling and undisclosed high commission simultaneously. If you have made a new claim since late 2017, you should automatically have been/be considered for PPI mis-selling and Plevin.
The way it works is if a firm was the seller of PPI and lender of credit, it will assess your claim for both aspects. Where one firm was the seller and another was the lender, they should pass the relevant part of the complaint on to the other firm and inform you.
You only need to make a Plevin complaint if you're sure you have not been mis-sold under the original reclaiming rules.
Also, if you've previously complained about PPI mis-selling but were rejected before August 2017, you could still make a valid Plevin complaint. Some people in this situation have already been notified by their lenders but if you haven't or are unsure, contact the ombudsman.
You should still make a claim if you used a broker
It doesn't matter where you bought your PPI, ie, whether it came via a bank or a broker/adviser. If you bought insurance for a mortgage, loan, hire agreement or a credit card that was covered by the Consumer Credit Act, you can still claim.
You don't need to know or to explain how much commission was paid to make a Plevin-based claim. Remember, one of the key issues is that the size of the commission wasn't pointed out, so go ahead and make that claim. Don't worry that the commission might have been shared out between the lender and a broker such as a mortgage adviser. What matters for a Plevin claim is if the total commission totted up to over 50% of what you paid for the PPI. If that's the case, it's the lender that must put you right.
Whether you're eligible to claim depends on what you bought, ie, was it a mortgage or another form of credit? Here's the lowdown and the key dates:
- Loans, credit cards or other kinds of credit agreements (excluding mortgages) are covered if the agreement started before 6 April 2007 and was still going on 6 April 2008. They are also covered if you took an agreement out on or after 6 April 2007.
This means, for example, if PPI was sold to you on a loan that you paid off IN FULL before April 2008, you probably won't be able to complain about undisclosed high commission.
The rules on dates are different for mortgages. Generally, if you took a mortgage out on or before 31 October 2004 and were still paying it off on or after 6 April 2008, you'll be covered. If you entered into a mortgage after 31 October 2004, you're not covered, but this is because mortgage sales were more regulated from this point on.
However, the rules around mortgages and regulated/unregulated brokers are complicated and full of exceptions. Similarly, Plevin payouts may not be possible on some sorts of credit such as store cards or home shopping accounts taken out or opened before 6 April 2007.
If you get turned down and aren't satisfied, the golden rule is to go to the ombudsman for an individual check on whether the rules are being applied correctly.
- Loans, credit cards or other kinds of credit agreements (excluding mortgages) are covered if the agreement started before 6 April 2007 and was still going on 6 April 2008. They are also covered if you took an agreement out on or after 6 April 2007.
If you've already claimed PPI mis-selling successfully, then no dice – you've already got some recompense; you can't get money back twice!
If you've previously been rejected, you may have been one of the 1.2 million who received a letter from their provider, explaining the Plevin reclaim process.
If you haven't had a letter, you can still complain on the basis that you may have paid undisclosed high commission. If you've still got details from your previous claim, use those to help.
No. It's worth checking first if you were originally mis-sold PPI. This is because if you discover you were mis-sold, you'll be entitled to much more cash. The bank must now also automatically consider you for Plevin, so if you're rejected you can then get a Plevin payout. If you're struggling to find paperwork, we've guidance to help you dig out what you can.
You can. Even though you made an active choice to buy PPI and benefitted from a payout, the undisclosed commission means you were mis-sold.
Don't worry if you don't have much in the way of old documents. Banks have been preparing in accordance with FCA rules to be able to find former PPI customers and should be able to find you with a few straightforward details.
To reiterate the points above, in the Plevin case the judges decided that the amount of commission involved had been unfair. So if the cost of PPI was made up of more than 50% commission and you weren't told this, you should get the difference back. As above, because typical commission was 67% most people are likely due a payout.
The FCA says the failure to disclose commission gave rise to an unfair relationship, and that profit share should be included in firms' calculation of commission. On a £10,000 loan over five years, your Plevin compensation would typically be £500. The FCA says there will also be historic interest plus 8% to consider.
If you've already got a PPI mis-selling complaint going through the motions, the FCA says a firm must now address Plevin under complaint-handling rules in its response to you. This means that, if it rejects your original mis-selling claim, it must now consider whether you're eligible for a Plevin reclaim.
What you hear, and when, will likely depend on each bank's approach to the issue. The FCA says it will be monitoring banks and building societies to make sure they don't ignore Plevin – and we'll be keeping an eye on what banks say too.
Banks must play fair on how they handle your complaint, so if you get a rejection letter from a mis-sold PPI application that also contains a Plevin payment offer as well, STOP!
Don't accept it willy-nilly – first make sure you go to the ombudsman in case it finds in your favour. The uphold rate for rejected PPI claims between April and June 2017 was 40% – so two in five rejected complaints were overturned in consumers' favour. We want to be sure banks aren't using Plevin offers to avoid paying out on genuine mis-selling claims.
Our concern here is that if you've used a claims firm in the past, the same company will now try to take a percentage of any Plevin payout you're due. We asked the FCA for guidance on this and it says that much will depend on what's in your contract with the claims management company (CMC).
Normally, a typical contract with a CMC firm would end with the original rejection of the first PPI complaint – which means they won't get a penny of any Plevin payout.
However, it does all depend on what's in the T&Cs. For example, if the original contract contains wording along the lines of 'we retain the right to any future payout' or has a clause which makes clear the contract remains 'live' despite a rejected claim, then the CMC may have a claim on a Plevin payout.
If this is the case, we've spoken to various industry sources who suggest any clause which does attempt to carry on the relationship could be an unfair term – in which case only a court can decide. We think any such contract would probably be unfair; if this happens to you, please let us know in this article's forum discussion.
There's also another possibility to take into account. Imagine a complainant uses a CMC for a mis-selling complaint that is rejected, but there is a clause buried in the contract which means they have an obligation to give them money from any future claim.
If this same person then uses a different CMC for a Plevin claim, there could be an obligation to give money to both CMCs. But to be clear, it's early days and we haven't come across an instance of it yet. When and if we do, we'll let you know here and via our weekly email.
As a general rule though, our advice remains the same: you don't need to use a claims handler for any type of claim.
Judges needn't follow the regulator's guidelines. On 2 July 2018, Manchester County Court ruled that Christopher and Joanne Doran should get all of their PPI premium back plus interest, totalling £17,345. This is four times what would've been paid out under the regulator's rules of only commission over 50% being repaid.
However, as it's a lower court, it doesn't yet set a legal precedent for others to follow (if it did, it could cost the banks £18 billion more). Our view is for all but the most militant to follow the normal bank and ombudsman complaint route, as you may still be able to go on to court later once, or if, a precedent is set.
The couple had been happy to sign up to PPI (it wasn't mis-sold) when taking out a £30,000 loan for house renovations. The judge ruled they should have been told about the huge level of commission on the policy – a whopping 76%. As they were not, the judge ruled that they should get all of the PPI premium back, plus some interest – awarding them £17,345.
While this was the most public judgment so far, it's rumoured to be the fourth time a court has ruled this way – and there's talk of other cases of banks settling out of court and confidentiality clauses being used. The county court doesn't set a precedent. And it's worth noting, this issue only applies to Plevin-only cases (as if you were mis-sold you are due all the money back anyway).
It's likely not to be quick. As there is an estimated £18 billion resting on this, if it was going against the banks it's almost certain they'd take it via the Court of Appeal and to the Supreme Court, which could take years. In the past this has meant there's been one test case and all other similar cases are put on hold.
The lender in the Doran case, Paragon Personal Finance, may appeal the case and said in a statement: "We believe this decision is at odds with other cases heard recently and does not create a precedent. The Doran case is one of a handful of legacy cases for Paragon and we are considering our position regarding appeal." However, on Thursday 8 November 2018, Paragon said it will not appeal the ruling.
No. The regulator cannot put a hold on the courts because they are separate entities. So you could still go to court for PPI mis-selling after the 29 August 2019 deadline. It's just assumed most people won't as it's much more difficult.
Assuming the precedent were to be set as in the Doran case (if not, there's likely no point using the court system), it could take years. The fact you've been to the ombudsman doesn't stop you going to court. Yet while you can go back as far as you like with normal PPI reclaiming, there is a statute of limitations of six years for court cases – in other words after that time you can't claim.
The question is, when does the six years start? Usually, it's six years after signing up for PPI, which would leave most people out in the cold.
However, where the issue is one which was hidden from you, or of which you were unaware, then lawyers have told us it'd be six years after discovering the issue. So in these Plevin-type cases, it's likely to be six years after you found out what the commission was. But there's no guarantee on this – it's the type of thing that could be argued in court.
You could put a claim in via the small claims court, though this is obviously a complex piece of law. You need to make sure you're comfortable with the details of the argument and doing it yourself. Alternatively, you could hire a firm of solicitors (on a no-win, no-fee basis) to do it for you. Clearly this is a more militant route than just going to the ombudsman and there is no guarantee you'll win more.
Regulator the FCA took time and a consultation to decide its stance. Many thought it got this wrong, including us at MSE. Our argument was that it set the ludicrously high benchmark that 50% commission is acceptable. Far from it.
It seems some county courts agree, and believe that this is not a reasonable figure for commission. If people didn't agree to it when they first took out the policy, they couldn't have had the expectation commission would be so high. Therefore, it is deemed an unfair relationship under consumer law – in which case, county judges are refunding the entire amount.
The deadline to reclaim PPI has now passed
NOTE - The deadline to submit a PPI claim has passed, with the reclaim window shutting at 11.59pm on 29 August 2019.
Missed the deadline? See our post-PPI deadline kit above for more info on what your options are, including reclaiming PPI through a small claims court.
The FCA has fixed Thursday 29 August as the final date for making a PPI reclaim – your complaint must be submitted and (in most cases) received by the firm you're complaining to on or by this day; miss it, and the complaint won't be considered.
With the exception of postal complaints, if you want to claim for PPI then the lender MUST have your complaint by 11.59pm on Thursday 29 August. Except in extreme unforeseen circumstances, ie, you were seriously ill around the time of the deadline, everyone is subject to this deadline.
The actual process of a bank checking your claim or you challenging a lender's rejection may go past this date, but the important thing to remember is that your initial complaint must have been received by 11.59pm on Thursday 29 August.
Yes, and it's a real worry. Claims cannot just be limited to those who can get their money back by themselves. Some who are due PPI reclaims have mental capacity problems, mental illness, literacy issues and more. MSE pushed hard on this in pre-meetings with the FCA about the deadline.
Thankfully it has factored it in to an extent. If consumers contact the FCA helpline on 0800 101 8800 and its staff feel they need face-to-face support, it will offer that. Yet sadly the deadline still applies, so it relies on people to get in touch with the FCA. Charities and others will be forced to pick up the slack.
The deadline is a mistake. Last year, more than one in five PPI claims rejected by the banks and taken to the independent ombudsman were overturned in favour of the customer (previously this figure was 54%).
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. We can't see that anything has changed. Let's hope it'll do this behind the scenes.
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If you don't know if you had PPI, who your lender was, are missing info or lack paperwork, don't worry – it's easy to find out
Lots of people are put off reclaiming PPI because they don't have full details or can't remember them, but don't let this stop you – act now to get in before the dealine.
It's dead simple if your loan was active up to six years ago. The bank will have all the details, but while banks aren't required to keep records that are over six years old, there are still ways to try to find out if you had PPI. Here's what you need to do...
Don't know if you even took out PPI?
Don't feel silly if you don't know – this is the number one question we get. First, you can try finding out by going back through all your old loan and mortgage statements and checking for any mention of an insurance fee or product to cover your payments if you lost your job through accident, sickness or unemployment.
Look for something that may be called 'payment cover', 'protection plan', 'ASU', 'loan protection', 'retail payment protection', 'loan care' or similar.
Can't remember who your lender was? Check your credit report
If you don't have documentation or simply can't remember which lenders you've borrowed from, don't worry – you can check your credit report. It lists loans, mortgages or other debts that were live within the last six years, even if they're now closed.
Sadly, though, it's not quite that simple – while you'll be able to see which lenders you've had accounts with, your credit report WON'T tell you if the accounts had PPI or not. But at least you'll know which lenders to check with.
Check your credit report for free at our MSE Credit Club.
Don't think it's unlikely – take the following success as a brilliant example:
I never thought I would be eligible for any PPI refunds especially as I had claimed on one of them. I saw Martin on TV discussing Plevin and put in a claim with literally no idea of loan account numbers or dates. The application took me five minutes and the money started flooding in. I am currently up to £26,000. Thank you so much.
- Think you had PPI and know the lender but don't have the paperwork? Contact 'em for details
If you've thrown away your paperwork, don't panic – there are a couple of options available to you. This applies even if your insurance ended more than six years ago.
The first is to ask your lender whether you had PPI. Some lenders have online forms which require basic information about yourself and when approximately you had your loan or credit product. Once you have an answer (which should arrive within 40 days) you will need to decide whether you want to proceed and, if you do, then submit an actual complaint.
Alternatively, if this service to check for PPI isn't available, you can ask the lender for the original paperwork and T&Cs from your product. Even if your account is now closed, you can ask for the paperwork via the lender's 'subject access request' form.
- If your loan was active in the last six years, it's easy as the bank must have all of your information under the 'statute of limitations'.
- If it ended more than six years ago, while it may be harder for the lender to provide the information required, do still request the details from your lender as the Financial Conduct Authority says it should assist with any PPI enquiries.
Here's a template letter to send off to your bank.
- Got your old bank paperwork but not sure if you had PPI? Call 'em to ask
The easiest way to check is to contact your lender. Most will be able to tell you whether you've had PPI, now or at some point in the past. For example, Nationwide has an enquiry form you can complete to find out.
L Barclays 0800 282 390, lines open 24/7 Barclaycard
0800 015 4210, Mon-Fri 8am-8pm
Capital One 0800 422 0478, Mon-Fri 8am-8pm, Sat 8am-3pm Co-op 0345 721 2212, lines open 24/7 HSBC 0345 740 4404, 8am-8pm daily Lloyds Banking Group 0800 151 0292 (Lloyds), 0800 151 0293 (Halifax/Bank of Scot), Mon-Fri 8am-6pm, Sat 9am-2pm MBNA 0800 917 6592, Mon-Fri 9am-8pm, Sat 9am-4pm Nationwide 0800 302 015, lines open 24/7 or via this link NatWest and RBS 0800 015 0319, Mon-Fri 8am-6pm, Sat 9am-1pm Santander 0800 171 2171, Mon-Fri 8.30am-5.30pm
If your bank 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.
Mis-selling's often systemic – in other words, it was part of the standard sales 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 make any effort to settle it, make a complaint to the independent Financial Ombudsman Service. It settles disputes between financial companies and their customers. It's completely free, and will decide if your complaint should be paid.
There's no limit on how far back you can go to make a claim
You can complain about a product sold at any time, and it doesn't matter how far back this goes. Most policies were sold between 1990 and 2010, though some stretch as far back as the 1970s (see point 4 above if you don't have the paperwork).
However, if you're claiming under the Plevin rule, often your policy has to have been active since April 2008. There are exceptions, and the rules are complex, so make a claim and leave it to the firms and the ombudsman to fathom out the regulations.
For some who, pre-2005, were subject to mis-selling that wasn't by banks, the Financial Ombudsman Service can't adjudicate, which makes reclaiming trickier. An example would be PPI on a car finance deal. In that case, if the provider doesn't play ball, you'll need to go to court, which is where no-win, no-fee claims firms could be useful.
This is all about the regulation of insurance and 15 January 2005 is the date the then regulator, the Financial Services Authority (now the Financial Conduct Authority), began regulating PPI sales.
If a firm or type of policy is regulated by the FCA/FSA it means the independent Financial Ombudsman Service can adjudicate if you are rejected – so all post-2005 claims can be decided upon by the ombudsman. And that's key as it saves you taking a claim to court which is far more complex.
Yet it's not that all pre-2005 sales fall outside the ombudsman's remit, as many still do. Even though PPI itself wasn't regulated pre-2005, you're fine if any firm selling it was itself regulated by the FSA, such as a bank or credit card provider.
The difficulty comes with non-financial firms such as car dealerships. With them, the ombudsman has no jurisdiction on sales pre-2005. We're not telling you not to bother, just that if rejected you may need to go to court to get redress.
If you think you're caught in this pre-2005 boat, call the ombudsman to check on 0800 023 4567 – others that can help include the Finance & Leasing Association, Association of British Insurers or the Financial Services Compensation Scheme if your lender's gone bust.
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 loan. 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.
Potentially, big money. Generally, the amount you pay for loan PPI is about 15% of your balance, but it could be up to 30%. It doesn't sound much, but it quickly mounts up.
For loan reclaims it could be many thousands of pounds. Yet calculating the actual amount's difficult and often unnecessary, as the lender will do this for you.
It's possible to estimate how much the insurance has cost to see what you can reclaim. It then depends whether you're entitled to the full amount, or just part of it.
One way of doing this is to work out what your monthly loan payment should have been. Use our loan calculator to enter your loan amount, length and APR and compare with what you were paying. Here are some examples – if you were paying more, it's likely PPI was included.
- A £5,000 loan for 5 years at 5% should be £95 a month.
- A £10,000 loan for 10 years at 10% should be £130 a month.
- A £20,000 loan for 3 years at 20% should be £740 a month.
Once you've worked out the amount, you can add the actual cost of any interest (as if your reclaim's successful you'll be put back into the same position you would've been without the insurance), plus the 8% interest a court would give to compensate (this was 15% for premiums paid before 1 April 1993).
The provider should also correct any further losses you've had as a result, such as any arrears charges due to taking the loan. But if you've an outstanding debt to the lender, it can use the money to pay it off.
In some circumstances your offer may be lowered due to a technical process called 'comparative redress'. It's not compulsory for you to accept this decision and we've discovered banks have been underpaying, often wiping a third off refunds. See the Comparative Redress section for more info on how to challenge, if this happens to you.
If you're in any doubt your bank has offered you the correct amount, call it to ask. See our independent leaflet for more info on what to look for on your offer letter.
Estimating the size of your reclaim
If you know your monthly PPI cost, simply multiply this by the length of the loan to work out its cost.
If not, you can do a very rough estimate. Work out the total loan cost by multiplying the monthly payments by the loan length, then take 15% off the total. This is a typical insurance cost, though it can be anywhere between 10% and 30%. Here are some examples:
MONTHLY REPAYMEN £100 3 years (36 months) £3,600 £540 £125 5 years (60 months) £7,500 £1,125 £150 5 years (60 months) £9,000 £1,350 £200 7 years (84 months) £16,800 £2,520 £150 20 years (240 months) £36,000 £5,400
No, it won't hit your credit rating and won't go on your credit report. At worst, in theory the bank you reclaim from could keep its own record, which may affect future applications to that bank. But we've not heard of this happening in practice.
Yes. You can reclaim for each policy you were sold, whether they're 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.
It's likely you'll have to pay a small amount of tax, but most claimants will be able to get the tax back. For more information see need-to-know 10 in this guide on reclaim tax on your PPI payout and Martin's step by step blog on how to reclaim tax but bear in mind, not all of your payout is taxed.
A payout's usually made up of three elements:
- A refund of the PPI premiums you paid
- Often the bank automatically lent you money (on top of the loan) to pay for the PPI itself; if so, you get the interest back on this part of the loan too
- Statutory (8%) interest based on the total amount you were owed (15% for premiums paid before 1 Apr 1993)
You are only eligible to pay tax on this last element, the 8% statutory interest. The reason for this is it's assumed that if you hadn't paid for PPI, you'd have kept the cash in the bank earning interest – so it's taxed like savings interest. But, since all the interest is 'earned' in the tax year you get your PPI refund, it's not completely straightforward.
This is because most savings interest now falls under the personal savings allowance (PSA), which allows basic-rate taxpayers to earn up to £1,000 tax free (higher rate £500, additional rate £0) in interest income each tax year.
After much back and forth, HM Revenue & Customs (HMRC) has confirmed that interest on PPI refunds can be included as interest under the PSA – so you'll only need to pay tax on it if it pushed you over the £1,000 threshold for the year (if you're a basic-rate taxpayer).
However, basic-rate tax will be taken off your PPI payment automatically, so if you're still within your PSA limit YOU WILL NEED TO CLAIM BACK THE TAX using form R40 (or form R43 if living overseas). Similarly, higher or additional-rate taxpayers will need to declare the extra income (just the statutory interest, not the other parts of the refund) to HMRC to ensure they pay the correct tax.
Contact your tax office, or call the income tax helpline on 0300 200 3300 or see the general enquiries web page for income tax if you need more info.
PPI reclaim been rejected? If you believe you were mis-sold, try AGAIN
The PPI story is always changing and we hear new stories of bad practice all the time – many banks have been fined for fobbing customers off and shoddy handling of their complaints.
- Rejected in the last six months? If so, you've got a right to take your case straight to the ombudsman. Follow the steps below to carry on.
- Been rejected but MORE than six months ago? If it's been more than six months since your complaint was rejected and you didn't go to the ombudsman, you may find it might not be as easy so what you'll have to do is restart your claim – unless, for example, a severe illness may have prevented you from being able to write to the ombudsman or you couldn't find original documents as part of a claim – and later found some.
So, for most, your only choice is to restart your case. Whether you're allowed to do that or not is complicated – generally, as stated above, you'll need a major reason why you didn't – but the Plevin case (see point 2) may help you here. If you're not sure whether you can restart, the best thing to do is contact the ombudsman on 0800 121 6222 or email.
Don't give up – the fact you were rejected in the past does NOT mean you weren't mis-sold. Our Plevin PPI Reclaim tool will help.
Yes, you can. But your chances of winning redress are likely to be much lower as a payout will be seen as proof of the policy having worked in your favour.
You can still reclaim if your lender/broker has been taken over or gone bust
Don't be put off if this is the case. Original lender taken over? When buying another company, 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 is liable for Egg's past PPI mis-selling.
If your lender's gone bust and you were mis-sold, you'll need to contact the Financial Services Compensation Scheme (the lender must have been FSA/FCA-regulated for you to do this). This is the official body which ensures the liabilities of finance companies are met. See Safe Savings for more info – the process is very similar.
Following your tips I claimed PPI against an old protection policy pushed by a now defunct provider – a 'mean to' job which took me months to get around to. About three hours' work resulted in a £4,000 return which included refund of premiums plus interest. Enough to say yes to a family wedding invitation to Florida.
- Mr C.G
Contact the company that sold you the policy – in this case, the financial adviser or broker. If the seller acted as an 'appointed representative' of the insurance provider, it may say to contact the provider instead.
You can reclaim from a company based anywhere in the world if it mis-sold you PPI. Yet the company needs to be UK regulated for you to get help from the Financial Ombudsman Service. Not all Jersey-based companies are UK regulated, so ask the company or call the ombudsman to check.
Contact the company that sold you the insurance – it may refer you to the debt collection agency if it has your files.
Yes, your finances now aren't relevant to whether you were mis-sold or not.
However, 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 and is unlikely to change its offer, even if you had ill health or are in financial difficulties.
This also applies to any policies purchased before a bankruptcy or insolvency order was made. Whether you've been discharged or not, these 'assets' remain part of your estate, so you're unlikely to get a refund. For more info, read this guidance on Gov.uk.
An extra word of warning: if you've got 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 complain yourself using this guide to help, then use the money to pay your lender what you owe it.
You CAN reclaim PPI for a deceased relative or if you live abroad
Many families only discover a parent or family member had taken out PPI when he or she dies, during the onerous task of sorting through paperwork and their affairs – but their death doesn't mean the end of the compensation they're owed.
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 Gov.uk for more info. Yet it's worth noting there may be problems proving what happened at the time of the sale if only the policyholder was present. Read Martin's blog on how to reclaim PPI for a deceased relative.
And if you live overseas, the fact you now live abroad is neither here nor there – you can reclaim. See the mis-selling checklist to find out if you were mis-sold.
I found several old loan statements showing PPI in my late husband's paperwork. The loan company no longer exists so I had to google the parent company for an address. Then, six weeks later, the bank behind it wrote back saying they would be paying me £33,000 as PPI repayment plus accrued interest! Thank you a million times.
- Mrs M. Cork
This depends on the lender. Some need two signatures to release the info. Some only pay part to the person complaining, and keep the rest for the partner. Others pay it all to one person – if the other ever reclaims, it'll tell them to find their ex.
Reclaiming almost certainly means your insurance will be cancelled – in effect you're 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 lies and deceit from supposedly 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'.
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You do NOT need to pay a company to reclaim your PPI
How loudly can I say this? You do NOT need to pay, no way, absolutely not, never! (Well, almost never. See 'Quick questions' below for the rare occasions when it's worth it.)
Companies known as claims handlers do very little that we don't already do for you below in our reclaiming tools. They used to take about 25% of the proceeds, plus VAT, but the Financial Guidance and Claims Act now provides a 20% cap plus VAT. This cap'll remain in place until the Financial Conduct Authority uses its own powers to impose a cap, although we don't yet know exactly when this will be.
Even with this cap, using a claims firm is still costly, whereas claiming is easy to do yourself to avoid being charged. Many people give away £1,000s unnecessarily when they could keep all the reclaimed cash themselves.
Just got a PPI payout this week – £1,800 going back over 10 years – and I did it all on my own without having to pay someone else. It was so easy.
- Ms L.G
If you're thinking it'll simply be easier to use a claims company, don't – you're still going to have to provide them with the same information you put in the form here. However, in certain circumstances – see below – you should go ahead and do it.
There are some situations when people will have to resort to using a claims company – and it's most likely to happen in the following circumstances. However, do read Martin's blog first: Is it worth using a PPI claims company? 10 things you need to know.
You've a pre-2005, non-ombudsman case. For some with older cases of mis-selling that wasn't by banks, the Financial Ombudsman Service can't adjudicate. An example would be PPI on a car finance deal. In that case, if the provider doesn't play ball then you'll need to go to court – in which case a claims company on a no-win, no-fee basis is useful. The problem is many claims companies just like to cherry-pick the easy cases. So it may be difficult to find one that'll take this on.
Mental health or illiteracy. For those people who would find the process too difficult to do themselves, a claims company may be a helpful route – though it's frustrating that society's most vulnerable may need to pay. It may be worth seeing if your local Citizens Advice bureau can help first.
You wouldn't bother doing it without one. If you're busy and know it'll never happen otherwise, and are happy to pay around a quarter to get your cash back, then it's a perfectly legitimate choice to decide to pay to get your mis-sold PPI money back.
It's 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 our Stop Cold Callers 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 (it spells SPAM), making sure it includes the sender's 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 the sender to the Information Commissioner's Office. This helps it 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 report 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, so the difference should be fully refunded.
If you paid by credit card, you may be able to get a refund from your card company under Section 75 if it was over £100 (full info in our Section 75 guide). If so, it's likely this is your best bet – contact your card company.
Fear not – since April 2019, the Claims Management Ombudsman (CMO) has been able to help with complaints about claims management companies (not including Northern Ireland). If you feel you've been treated unfairly, this is generally the most straightforward route to take.
You may consider you were treated unfairly if the company was unclear about the fees it charged, gave you incorrect advice or repeatedly contacted you without consent.
If you lodged a complaint before April 2019, it would likely have been handled by the Legal Ombudsman. Existing cases should have been transferred to the CMO however, which falls under the remit of the Financial Ombudsman Service.
First, make your complaint to the claims handler. It has eight weeks to reply, but if it takes longer or you're not happy with its response, you can ask the CMO to help. Just fill in the form on its website or call 0800 023 4567.
It's free to use, independent and has the power to make firms pay compensation, reimburse costs or provide other forms of suitable redress where it finds there has been unfair treatment. It's also happy to give guidance on how to start a complaint if you give its enquiry line a call. Or you can ask it a question in the Ask the Ombudsman MSE Forum thread.
In order for the CMO to be able to look at your complaint, you generally need to fit the following criteria:
- You're complaining to the CMO within six years after the problem took place, or three years from finding out about it.
- You refer the problem to the CMO within six months of receiving a final response from your claims handler.
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.
RECLAIM tax on your PPI payout and get £100s back
For those who are in the process of claiming, or plan to do so before the August deadline, it is likely any payout will be taxed, meaning you would probably have to make a reclaim.
This is because most savings interest (including interest on PPI refunds) now falls under the personal savings allowance (PSA), which allows basic-rate taxpayers to earn up to £1,000 tax free (higher rate £500, additional rate £0) in interest income each tax year.
While most savings interest is paid without tax being taken off, with PPI payouts, the statutory interest compensation usually has 20% automatically deducted – and as most don't hit the threshold so needn't pay tax, you can reclaim it.
Read more about this and how to reclaim the money in Martin's blog.
It's just the compensation you were paid that is taxed – not the PPI refund itself.
This statutory interest is paid at 8% a year, but is not compounded, so you don't get interest on the interest.
The key date is 6 April 2016 (when the personal savings allowance came in) and beyond.
Compensation is taxed in the year it was paid back, so even if you took out your PPI policy in, say, 2004, it's when you got the money back that counts.
So if you got your money back on 6 April 2016 or later, then bingo.
Depending on the size of your PPI payout and when you first took out the insurance, the tax refund could be £100s or £1,000s. Go to our rough ready reckoner for more details.
In the meantime, here's how refunds are worked out. Take the example of Betty Basicrate, she's a 20% taxpayer. In 2017, she…
1) Earned a little over £200 interest on her savings
2) Got a PPI payout, which included £850 of statutory interest
Her total 'interest' for the year was £1,050, so she should only be paying 20% on the £50 over the £1,000 personal savings allowance threshold (so £10 tax), while the rest is tax-free. Yet the PPI automatically had £170 tax taken off, meaning she is due back £160.
Unfortunately, if your payout came before this date and you were a taxpayer at that point, you're not due a reclaim.
Previously, basic-rate taxpayers saw the 20% automatically deducted, but as the personal savings allowance was not in place at this time there are no grounds to ask for it back. Likewise, a higher-rate taxpayer should have been paying 40%.
If you were a non-taxpayer though, you should reclaim any tax on your PPI just like other savings income.
Similarly, higher or additional-rate taxpayers will need to declare the extra income (just the statutory interest, not the other parts of the refund) to HMRC to ensure they pay the correct tax.
To fill in the R40, you'll need to detail your income for the year the refund came. You can find that info on the year in question's P60 (or P45 if you moved/stopped work). You'll also have to put in the tax that was taken off the statutory interest part of the PPI payout. This should be specified in the bank or lender's PPI refund letter.
If you received PPI payouts in different years, you'll have to fill in a form for each year.
If you need more help, a step-by-step guide to filling in this form can be found in Martin's blog: Had a PPI payout? If so, you can reclaim the tax on it. And of course, you can contact your tax office or call the income tax helpline on 0300 200 3300 if you need more info.
The mis-selling checklist: How do YOU know if it was mis-sold?
Don't start this thinking: "Do I have evidence?" Instead, ask yourself: "Did this happen to me?" If it did, the likelihood is it happened to other people as well.
The way providers decide, based on the balance of evidence they've got, is "Was this likely to be correct?" All you need do is answer the question about whether it happened to you, NOT "Can I prove that it happened to me?"
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.
Here are the key mis-selling categories in our checklist. If you fit one or more of these, you probably have a case. And with the introduction of the new Plevin rule, even just having had PPI now means you could be entitled to a payout...
A. 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 loan to be accepted for the product. This is mis-selling.
Any company that subscribes to the voluntary Lending Code (see subscriber 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 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.
Too many people have told us of their surprise and shock to discover they have been paying PPI premiums for years – and are stumped as to why. Yet there are many ways it was mis-sold to you without your knowledge...
If you bought face-to-face or on the phone...
Here, the salesperson was responsible for ensuring you 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 have 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 (go to our reclaiming tool for more); the last being to the free Financial Ombudsman Service, though there's a chance you could get a payout sooner.
It's scary, but true – many still have loans from when the picture was like this:
You want a £5,000 loan over five years. You've seen it advertised at a cheap 7% rate, so you call up.
You: "I'd like a £5,000 loan over five years please."
Bank: "I presume you've seen our competitive interest rates."
You: "Yes, can you give me a quote please?"
Bank: "Sure, our fully protected loan is £125 a month."
Most people would find it virtually impossible to mentally calculate how much the monthly repayments should be, so £125 sounds fine.
It's a brilliant hustle. The answer contained two little words that make 'em a fortune – "fully protected". They mean you're also being flogged expensive insurance.
Actually, the cost of the loan at 7% should be £100 a month – the remaining £25 is to pay for the insurance – so with just the loan you'd have repaid the £5,000 borrowed plus £950 in interest.
However, the insurance adds £1,500 over the life of the loan; that's MORE than the interest cost and it's almost pure profit for the bank!
Widespread mis-selling has left many with unnecessary cover. Even if you need it, if you got it through your lender it's likely you're paying four times more than you need to.
If you bought online...
Nowadays, many apply for loans online. If you signed up on the internet, reclaiming's more difficult as 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, though if you took out a loan before this date, check urgently – you may have bought insurance without knowing.
C. 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 was not what you agreed to, the insurance term was shorter than your loan and you didn't realise, or if you thought it was a joint policy but in fact it was only in one person's name.
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 speak to someone when applying for a loan, they need to consider your circumstances. Buying online places more reliance on you doing checks.
However, because PPI polices earn providers large profits, staff were often highly encouraged to sell as many as possible, and were well paid for doing so, meaning mis-selling was rife.
If you contacted a provider by phone or in person, and it 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 already have insurance cover?
For example, if you had a separate income protection policy or your employer provided an illness and redundancy package, and you informed the salesperson you had this cover, but they insisted you also 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 loan, but the insurance is only in one name?
If you've checked your paperwork and found all names responsible for paying back the loan aren't covered under the insurance – which is unfair in itself as either could be chased for money if you get behind with payments – and you were told or thought that all names were covered, go to how to reclaim.
- Is the insurance term too short?
Long-term loans were often sold with a single premium policy – until they were banned in May 2009 – lasting a maximum of five years, no matter how long the loan was for. If you've checked your policy and found it didn't cover the full term of your loan, but you thought it did, the salesperson should have pointed this out. If the salesperson didn't, go to the how to reclaim section.
Have you tried to cancel your policy?
Before March 2007, some contracts had terms that said you couldn't cancel the policy even if you had paid off your loan or had a change of circumstances. Since the then Financial Services Authority (now the Financial Conduct Authority) looked into these refund terms, cancelling is now possible for all current and future contracts. So if you tried to cancel your policy and were told you weren't allowed to, or that you needed to take out a new agreement with different terms, go to the how to reclaim section.
Did you sign up for the finance in a shop?
If you got a loan in a store, such as a car dealership, the insurance 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, start a reclaim to check the insurance was sold in your best interests.
Were you told the total price?
Before you agreed to take the loan, the lender should have told you the full cost of the insurance, both the monthly cost and total price over the policy, so you could tell if it was affordable. If you weren't given costs in advance, or if you had a single premium policy that cost more than it would have paid out, or you weren't told you would pay interest on the insurance cost, 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, ask for an explanation.
If you were unemployed or retired when you were sold the policy, check if it included unemployment cover. If it did, the unemployment cover's worthless – this should've been pointed out.
If you were self-employed at the time, 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.
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've 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 misinformed.
It's likely you were mis-sold if either:
A. You made the salesperson aware of your situation and they suggested you get it anyway.
B. 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 a template in the How to reclaim section.
E. 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.
You should have been asked about health issues when you got your policy. If you weren't, 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 brushstrokes' 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.
Having had medical problems in the past 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 other reasons to complain, then contact your lender. Find full details and template in How to reclaim.
The regulator has said it wants to see better practice. Many major providers, including Lloyds, LV and Capital One, have been fined for "not treating customers fairly". If yours has, it's very likely you've a case.
- Alliance & Leicester: Fined £7 million in October 2008 for serious failings in PPI telephone sales between January 2005 and December 2007. A&L said it would write to all customers concerned. More info: Alliance & Leicester.
- 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.
- Carcraft: Fined £91,000 in May 2012 for the poor monitoring of PPI sales between April 2007 and September 2008. More info: Carcraft.
- Clydesdale Bank: Fined £20,678,300 in April 2015 for serious failings in its PPI complaint handling processes between May 2011 and July 2013. More info: Clydesdale Bank.
- The Co-operative Bank: Fined £113,300 in January 2013 for unfairly putting complaints on hold during an unsuccessful legal challenge by the British Bankers' Association against FSA measures designed to ensure all PPI complainants were treated fairly. More info: The Co-operative Bank.
- Five motor retailers: GK Group Limited, George White Motors Limited, Ringways Garages (Leeds) Limited, Ringways Garages (Doncaster) Limited and Park's of Hamilton (Holdings) Limited were fined a total of more than £175,000 in August 2008 for exposing a total of 2,175 customers to the risk of being sold unsuitable PPI policies. More info: Motor retailers.
- HFC Bank, also trading as Household Bank and Beneficial Finance: Fined £1,085,000 in January 2008 for putting customers at an unacceptable risk of being sold PPI when it was not suitable for them. Failings took place in branches between January 2005 and May 2007. More info: HFC Bank.
- Land of Leather Ltd: Fined £210,000 in May 2008 for allowing its sales force to sell PPI without effective monitoring or training between May 2006 and February 2007. More info: Land of Leather.
- Lloyds Banking Group: Fined £117 million in June 2015 for failing to treat its customers fairly when handling PPI complaints between March 2012 and May 2013. More info: Lloyds Banking Group.
- Lloyds Banking Group: Fined £4,315,000 in February 2013 for failings in its systems and controls that resulted in up to 140,000 customers receiving delayed payments between May 2011 and March 2012. More info: Lloyds Banking Group.
- Loans.co.uk: Fined £455,000 in October 2006 for not having appropriate systems and controls to minimise the risk of unsuitable sales. More info: Loans.co.uk.
- LV: Fined £840,000 in July 2008 for serious failings in the sale of single premium PPI on telephone loans sold between 14 January 2005 and 8 August 2007. It agreed to compensate customers if their policy was not appropriate and to refund interest automatically. More info: LV.
- Redcats: This home shopping company was fined £270,000 in December 2006 for not having adequate systems and controls in place to minimise the risk of unsuitable sales. More info: Redcats.
- Regency Mortgage Corporation: Fined £56,000 in September 2006 for not collecting sufficient information during a PPI sale to ensure its recommendations met customers' demands and needs. More info: Regency Mortgage Corporation.
- Swinton: Fined £770,000 in October 2009 for serious failings and an unacceptable level of non-compliant sales (on cover for home or motor insurance) between December 2006 and March 2008, when it stopped selling PPI. Swinton said it would contact over 350,000 customers who paid for the PPI and offer a full refund, as well as proactively reviewing previously rejected claims. More info: Swinton.
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 start a reclaim asking for justification that your policy was sold with your best interests in mind.
- Alliance & Leicester: Fined £7 million in October 2008 for serious failings in PPI telephone sales between January 2005 and December 2007. A&L said it would write to all customers concerned. More info: Alliance & Leicester.
G. Just having had PPI means you were mis-sold and are likely due a payout
There are now grounds to make a complaint about a PPI policy based on the Plevin case. Technically, this isn't mis-selling – it's a breach of rules regarding fairness relating to the Consumer Credit Act – but the effect is the same.
The Plevin case suggests almost anyone who has simply had a PPI policy was likely mis-sold, and could be due money back. Financial Conduct Authority rules say firms should generally consider a complaint on the grounds of an unfair relationship between lender and borrower if commission was above 50%. With PPI sales, typical commission stood at 67% so most people who took out PPI are likely owed.
After months of deliberation, the regulator has ruled that those who have already complained about PPI but whose complaint was rejected are likely to have new grounds for redress in light of Plevin.
This effectively means that if the cost of PPI was made up of more than 50% commission – what the FCA calls the "tipping point" – and you weren't told this, you should get the difference back. And since typical commission was 67% with PPI, most people are likely to have a valid complaint.
But this ruling will also potentially apply to millions of others too – those who took out PPI and have no other type of mis-selling claim against the policy.
When the form asks why you're making a complaint, simply state you weren't told about PPI commission and that new Plevin rules from the City regulator mean you're now likely due a payout. Then make clear if you've previously had a mis-selling complaint rejected or you're applying because you simply had a policy but didn't know about the commission.
However, not everyone who's previously had PPI can apply on the Plevin rule – see point 2 above.
Help as your case progresses
Whether you apply using our new free tool or the template, it's crucial that you keep a close eye on the progress of your complaint. These are the key stages you must keep track of, and take action once you reach each one.
Received a mis-selling offer from your bank? Make sure it's fair
If you're making a mis-selling claim (not Plevin) then at this stage you could hear back from your bank with an offer to refund your PPI premiums. Some that offer letters may also include a leaflet from MSE and Which? to help you check your PPI offer is fair, and know your rights if you feel it isn't.
Here's a copy of the leaflet – let us know if you received it and whether you found it useful in the MSE Forum. But wait... before you jump for joy, be sure you've received the full sum you're entitled to...
The letter's hit the doormat and it's good news. You're getting a refund and it says you'll be put back into the position you would have been in had you not taken out PPI in the first place.
But, hang on, before you get too excited, there's an extra sting in the tail being inflicted by some of the banks, which means you might not get as much money back as you'd hoped. And it goes by the name of comparative redress. Catchy eh!
If Barclays, Lloyds or RBS/NatWest offered you a PPI refund on a LOAN from 2012, you may be owed £100s more.
What's the problem?
There are two types of PPI. One is added in full at the start of a loan (known as a single premium) and the other is added to your account monthly (also called a regular premium).
If your bank has decided it shouldn't have sold you a single premium but it should have sold you a regular premium instead – you've been offered something called comparative redress. It's basically suggesting it wasn't wrong in selling you PPI; it just sold you the wrong type.
If it's made this call, your offer will be the difference between what you actually paid and what you would have paid, if you'd been sold, in the bank's opinion, the correct product. It could mean you've been swindled by £100s or £1,000s.
For example, if the full refund of your single premium would be £1,000, and the cost of a regular premium would have been £400, you'd only get a refund of £600.
It'll only be used for PPI taken out with a loan and not other types of PPI, such as credit card, store card, mortgage, catalogue, overdraft or car finance insurance.
You're unlikely to be affected if your case has been to the ombudsman, as it would have already looked at this part of your complaint.
Yes. Since the High Court ruled in favour of mis-sold consumers in April 2011 comparative redress became part of the regulator's rule book, so they are well within their rights to use it.
Not only that, but there's also a strange rule that says how much they're allowed to charge for the replacement PPI policy. It says:
The firm should pay to the complainant a sum less the amount the complainant would have paid for the alternative regular premium payment protection contract. The firm should, for the purposes of redressing the complaint, use the value of £9 per £100 of benefits payable as the monthly price of the alternative regular premium payment protection contract.
This means, even if the different type of PPI your bank suggests you should have been sold didn't actually exist at the time you were sold the PPI (which was usually the case) your bank is allowed to charge you £9 for every £100 you borrowed. So, on a loan of £1,000 the policy would have cost £90.
The rules say this can only be used as long as it's done "fairly" and consistently. It's often been used when the bank decides you had no other way to repay your loan if you were ill or lost your job, so you needed a way to protect your payments.
It wasn't used straightaway though. A couple of lenders started in late 2012 and early 2013. Others soon followed suit but some have since stopped. See which lenders below. But the point is:
It's ONLY for loan PPI reclaims made from late 2012
A group of claims handlers found that, over a 12-month period between mid-2013 and mid-2014, up to 30% of PPI offers made by some providers included comparative redress, with claimants affected being about £730 worse off on average. See the MSE News story for more.
We contacted the major banks and building societies and the following confirmed they use comparative redress or have offered it in the past:
- Barclays offered comparative redress between October 2012 and October 2013.
- Lloyds Banking Group has offered comparative redress since February 2013 and continues to do so.
- The RBS Group (incl NatWest and Ulster Bank) has offered comparative redress since early 2013.
The following providers have confirmed that they've never used comparative redress:
HSBC says it offered comparative redress to a handful of customers, but it was never part of the bank's formal complaints process.
How to spot if you had comparative redress
Dig out your PPI offer letter and look for the mention of comparative, or alternative, redress. If you no longer have the letter ask your bank to send you a copy.
It could also be referred to simply as a different type of PPI, a monthly policy, or something that would "cost £9 for every £100 of your monthly repayment".
If you're not sure, call your bank to ask: "Did my offer contain comparative redress?" See contact details for the main banks in the table above.
How to challenge the decision
Whether you received your refund offer in the last week or over a year ago, if you disagree you would have bought this different PPI it's NOT compulsory for you to accept your bank's decision – and you can get your money back EVEN if you've already received a payout.
Contact your bank
If you believe you never needed PPI in the first place, simply call your bank to tell it why. You are able to rightly reclaim what is yours.
Examples of when you might want to challenge a decision include when you already had cover from work or savings, or you repaid the loan early or refinanced so there was no need for loan insurance.
This should just be a matter of making a quick phone call to make sure your bank had all the information it needed to make its decision, but if you'd like to put your request in writing, our template letter may help.
Can the ombudsman help?
The free Financial Ombudsman Service (FOS) can help with most cases if you think your bank's not playing ball.
Complaints are time-barred from going to the ombudsman if it's over six months since your last contact with your bank. But don't let that put you off.
Call the ombudsman on 0800 0234 567 (0300 1239 123 from a mobile). And see its leaflet on Comparative Redress.
As comparative redress is a more recent development, the FOS said it's happy to be a point of call for enquires and will look at taking on cases, new and old, on a case-by-case basis.
If you're rejected during the reclaim stage, whether it's from an old mis-selling claim or Plevin claim using our Resolver tool, you'll automatically receive a trigger reminder to take your complaint to the ombudsman. There'll be a few brief details to fill in and then our tool will send on the details of your original complaint to the ombudsman. Otherwise, if you're using our template letter, it'll be up to you to escalate it.
The ombudsman is the official, independent service for settling disputes between financial companies and their customers. It 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 PPI claim form 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.
Just contact the ombudsman and ask it to take on your case. The Resolver tool allows you to do this. The ombudsman will then 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 few years, of the cases that needed to go as far as the ombudsman, around two-thirds were awarded in consumers' favour. And even if yours isn't, there's no penalty for losing – it just means you don't get the money back.
Let it know your story – the non-Resolver route
If you haven't already filled in the PPI questionnaire in the template letter section you'll need to do this now. Enclose copies of any paperwork that backs up your case. If you need help at any stage call the ombudsman's helpline on 0800 0234 567 (or 0300 123 9123 from a mobile).
Everyone also needs to fill in a copy of the ombudsman's complaint form:
You can either do this via its online form – which allows you to fill out the PPI questionnaire at the same time – or you can use one of the forms 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 questions 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.
What to do if you're having problems opening the guide
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. Though don't worry – you can leave the matter to the ombudsman to resolve and it will contact you with any offers from your lender.
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 – 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 our Your Financial Rights guide.
When won't the easy route work?
The ombudsman can only help with complaints about Financial Services Authority (FSA)/Financial Conduct Authority (FCA)-regulated companies. All PPI sales from January 2005 are regulated by the ombudsman, but some earlier policies aren't. Any provider that was regulated before this will be covered by the ombudsman, so all banks' and building society loans should be fine.
Sadly, if you got PPI in 2004 or earlier and the provider wasn't FSA/FCA-regulated (such as car dealerships, window installers or some hire purchase arrangements), the ombudsman has no jurisdiction. This makes reclaiming trickier, though it's still worth trying.
Call the ombudsman to check – it'll put you in touch with any other organisations that may be able to help, including the Finance & Leasing Association, Association of British Insurers or the Financial Services Compensation Scheme if your lender's gone bust.
This is a bit of a nightmare for some. Using the Financial Ombudsman Service is 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 couple of years 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.
Sadly this is a common, frustrating problem. Banks 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 your bank 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 a bank taking money shouldn't leave you in financial hardship. If it does, tell your bank and complain to the Financial Ombudsman Service 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. If you still don't think it's enough, you can complain to the Financial Ombudsman Service.
Our understanding your offer letter leaflet will help you decide if your offer is fair and what to do if you think it isn't. You don't need the help of a claims handler to do this, it's free and easy to do yourself.
Usually not, although if you're in any doubt your bank has offered you the correct amount, call it to ask. Our understanding your offer letter leaflet will show you what to look for.
An example of this may be if your lender made you an offer including something called comparative redress.
A few lenders, including Barclays, Lloyds and NatWest, have been using this system since late 2012, and it may have meant they underpaid you, often wiping a third off your refund.
It's used when your bank decides it shouldn't have sold you one type of PPI, but another was more suitable. It'll offer you the difference between what you actually paid and what you would've paid, if you'd been sold – in the bank's opinion – the correct product.
It could mean you've been swindled by £100s, so read the comparative redress section above for more info on how to challenge the decision if it's happened to you.
We think some lenders split payments into two parts, eg, 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 bank to ask.
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