Payment Protection Insurance is not an inherently bad product; in the right time and place, for the right person, it can be very useful.
However, the fact remains that thousands of PPI policies were mis-sold, to customers who did not want it, need it or ask for it.
The problem that many of us face is how to tell if that figure includes us. We lend a helping hand:
Which products were sold with PPI?
PPI is intended to cover your credit repayments on any nominated form of borrowing, in case you became unable to work if you became ill or were made redundant. This means that it was sold on a wide number of different financial products, and mis-selling was equally as common.
The products you should check include:
Credit cards (most common)
Personal loans (most common)
Dealership car finance
How far back should you check?
To give your PPI complaint the best chance of success, you need to raise it within six years of paying into the policy and within 3 years of realising it was mis-sold. While you can complain about a product at any time, this does matter:
If it is more than six years since your PPI has expired
The institution that sold the policy to you is no longer required to keep any paperwork. You are still perfectly entitled to make a claim, but you will have to provide all evidence yourself.
If it is more than 3 years since you knew there was a problem
The Financial Ombudsman cannot consider cases where you have known about the problem for more than 3 years. You can still claim, but you will have no way to escalate the complaint if it is rejected.
This means you need to look for any financial products you have held which apply to those timescales - even if it has since closed, or if it began more than six years ago.
So what should you do?
Credit protection insurance
Loan repayment insurance
Retail payment protection
The easy way to do this is to check your credit reports: Experian, Equifax or CallCredit will list every debt you have had that within the last 6 years. You can see your credit file for a one-off £2, or get a free trial.
Next, cross-check your products against our 'known offenders' list above and prioritise those that feature. It makes sense to look at these first because lots of other people have already successfuly claimed.
You can ask your lenders direct if you had PPI, and if you were mis-sold, but if they do not know you will need to read the terms and conditions for each financial product to find out.
What about products you do not have any records for?
If you are told you did not have PPI, one option is to ask who underwrote their policies (i.e. the company used to determine your insurance).
You can contact the underwriter directly to see if you ever held a policy with them.
You can still apply for PPI compensation on other products even if you do not have the paperwork - provided you have paid into them since 2009 (that six year timescale again).
The lender will hold your documents for 6 years after the product itself was last active, meaning you can request copies under the Freedom of Information Act.
This solution also applies if you cannot tell whether a given product included PPI. You will need to do this in writing and they can charge up to £10 to cover their administrative cost but this is worth doing.
Trouble tracking them down?
Depending on your claim, you will be able to claim between 90% and 100% of your mis-sold premiums via the FSCS.
If you cannot find the contact details for whichever company provided your product, they may have merged with another company or been taken over.
The good news is that new owners are usually liable for debts and compensation in these situations; you will simply need to find out the name and contact details of the new/merged company.
If they went out of business altogether, you can still apply to the Financial Services Compensation Scheme for PPI redress. You can search for "in default" companies on the FSCS website to find out if your old provider features.
Remember, even if it gets to this stage you should still follow up your potential claim, and still do so yourself rather than using claims management companies who will take up to 25% off your payout.
If you have trouble with your PPI claim, use the Resolver website to help with your complaint.
Listen to Hannah Maundrell talking about PPI claims to BBC West Midlands.