Were you mis-sold PPI?
In most cases this comes down to whether you have been sold an insurance product whose terms and conditions prevent you from ever making a claim.
You were not employed when you took out the policy.
You were self-employed and were therefore sold a policy you were ineligible for.
You had a medical condition that could have prevented you from working when you took out the policy.
If the entire cost of the PPI was not explained to you, or if you were only quoted the cost of a loan including PPI.
If you were told that PPI was compulsory. Lenders can insist you have it, but they must allow you to shop around.
If important features of policy, such as cancellation, were not explained.
If you were older than the upper age limit of the cover at the time the policy was sold to you.
If you were covered by another policy or type of policy, e.g. some forms of income protection.
If you were sold PPI by one of the firms against which the FCA has taken action - you can check this by searching the FCA register. In particular, look at the firm's 'disciplinary history'.
How do you claim?
Write to the company which sold you the PPI policy, explaining why you believe you were mis-sold PPI (or unfairly treated and asking for a refund).
Call your lender to follow up on your letter. You may be able to handle the rest of your claim over the phone with your company.
Write to them again re-stating your grievances and this time insisting you will go to the Financial Ombudsman if you do not get a refund within 14 days.
If the company has denied that your PPI policy was mis-sold, use this letter template.
If the company have written to you acknowledging your complaint but offering an inadequate amount in settlement use this letter to fight back.
If you think you have been mis-sold PPI, yes. However, it is important to be aware that PPI only came under the jurisdiction of the FCA in January 2005. PPI policies sold before then are not covered by the latest rules - though you can still complain to the Financial Ombudsman Service if you want to reclaim your premiums.
How was PPI mis-sold?
You were told you had no choice
You may have been told that PPI is compulsory, some lenders have been known to refuse to even give a quote without a commitment to taking up PPI being in place.
This is entirely untrue, lenders can insist on you having some form of PPI, but you do not have to buy it from them.
You had no idea
Lenders have been known to add PPI to credit agreements without even telling the customer.
Some lenders used a scheme known as the 'single premium' approach which involved adding the total cost of the PPI policy to the loan - so it is paid up front.
The problem here is that the cost of the PPI is rolled into monthly repayments, so you end up paying interest on the cost of the PPI.
You applied online
If you took out your loan or credit card online, things get more difficult as the full terms and conditions of the borrowing agreement will be available to you.
However, if the site you used included pre-ticked boxes on their forms you may still be able to claim. This practice was officially stopped in July 2007, so check any borrowing you had taken out before this date.
How much will you get back?
If you are successful in proving you were mis-sold PPI, you will get back all your premiums, plus 8% interest.
If you were not mis-sold cover, but you were treated unfairly later, for instance when trying to cancel a policy, you will be entitled to a 'fair refund'.
For example: if you tried to cancel your policy after six months, you will usually be entitled to a refund of any premiums after that date, minus any 'reasonably incurred costs' the insurer may claim.
Avoid using a PPI claims companies
These companies will usually contact you randomly over the phone. They will work out how much you are owed and pursue compensation on your behalf.
Be warned, as many will charge a fee if your claim is successful some also charge you if it is not and deduct it from the amount you receive in compensation.
Is PPI worth it?
If you are worried about losing your job or being unable to work in the future ,though not because of a pre-existing medical condition, PPI can be a cost effective way of protecting yourself.
Make sure you shop around and find a low cost policy and be sure to understand the policy exclusions and reasons why a claim might be rejected, and:
Check any new credit agreements to see if PPI has been added without your knowledge
Do not get bullied into taking out PPI
Read the small print and ask questions about claiming before you buy
Remember that adding the cost of PPI to a loan will make it more expensive overall