Payment Protection Insurance (PPI)
The 'Have I Been Missold ?' Checklist
Before starting your claim, if possible get a copy of the policy terms and conditions, if you don't have these you can ask your lender to provide a copy. Make sure they date back to the time of your agreement as they can change from time to time. Lenders can ask for £ to provide these, you could include a cheque for £ to speed up the process, but please don't send cash.
The PPI Seller has the responsibility to ensure you understand the nature of the product and that is it appropriate to you.
All PPI policies will have exclusions which you should have been told about. As most PPI policies are bought with a credit agreement for a loan or credit card, rather than standalone, the important thing is what was said at the point you were sold the product, below are a few key misselling categories. If you fit into one or more of these categories you more than likely have a case to reclaim your PPI.
Were you told or sold the wrong thing?
This covers anthing from being told the insurance was compulsory to the loan product, to now knowing if you had even purchased a PPI policy, to the face that you were already covered under a different policy, through work or by a partner.
It also applies if the policy isn't what you agreed to.
Were you self-employed, unemployed or retired
If you were unemployed or retired then check the policy included unemployment cover, if it did them it should have been pointed out to you, unemployment cover is worthless.
If you were self-employed you need to check whether you were eligible for a payout if your business went bankrupt or become insolvent, which isn't usually the case in most PPI policies, if not and it wasn't pointed out you may have a case.
Had you had medical problems in the past?
Most PPI policies exclude existing medical conditions, meaning you are unlikely to be covered for medical problems you have had in the past. This should have been asked when the product was sold to you, and informed the policy could be affected.
Has your provider already been fined for PPI problems
Many of the major loan product and PPI providers have been fined for "not treating customers fairly", these include Alliance & Leicester, Egg and Capital One, if yours have you probably have a case to claim.
Were you sold a 'Single Premium' loan policy
A single premium policy is where the whole cost of the insurance is added as a big lump sum at the start of the agreement, which is then repaid over the term of the loan. Many loan policies were sold like this and while sales are soon to stop, if this applies to you and you left or changed your agreement part way through, you may be able eligible for a part refund.
Did you buy a loan product online
If you applied for your loan or credit card online, reclaiming PPI is usually more difficult as the full terms and conditions are usually available on the web site selling the product.
An exception to this is if you applied for a product from a lender using pre-ticked boxes, meaning you had to opt out by un-ticking the box for the insurance, rather than opt in (ticking the box to say yes). From July 2007 all lenders agreed to stop doing this but if you took out an agreement prior this date check your policy for insurance.
How far can you go back ?
Did the PPI Policy start within the last six years?
If your policy started within the last six years, whether you're still using it or not: Reclaim and ask the lender for a copy of the paperwork if you no longer have it.
Is your policy older than six years old, but still active or ended in the last six years?
If the policy started over six years ago and you are still using it, or it ended in the last six years: Reclaim and ask your lender for a copy of the paperwork if you no longer have it. Your chances of a successful claim may be reduced if you have been aware of the misselling for some time, you have made a complaint or the account and policy is very old.
Is your policy older than six years and has ended over six years ago?
If you policy ended over six years ago and you have the paperwork: Reclaim, although your chances of a successful claim are reduced somewhat, as it will depend on what you can remember about the sales process when taking out the product.
If your policy ended over six years ago and you do not have the paperwork, it is unlikely a claim would be successful as lenders are only obliged to keep records for the past six years, it's unlikely they paperwork would no longer exist.
Reclaiming How To
Write a letter to the company that sold you the policy simply asking for a refund at this stage you don't need to ask them how much or specify the amount to be refunded they will have these records and will be able to calculate this. You need to specify that you believe the PPI policy was missold, you are writing to formally complain and want your money back.
If the seller was acting as an appointed representative for the insurance provider, they will probably tell you to contact the insurance provider directly. Use the address of the branch you visited for your first letter, any additional letters can be sent to the head office is necessary.
It is worth checking if the company you were dealing with was regulated by the FSA at the time the agreement and policy were put into force. If ether the lender of the seller (Insurance Broker) were, its best to contact them first as you will be able to go to the Financial Ombudsman Service for further help if needed.
Below is a template letter to select the most relevant points. You should also enclose copies of any paperwork that backs up your claim and send the letter by recorded registered post, keeping a copy for yourself.
It is important to understand that once you write your initial letter asking for missold PPI to be refunded is the lender will almost certainly reject your claim and come up with a reason for doing so, it's important to understand this must be ignored. This is just an attempt to stop you carrying on the procedure of stating your claim.
The Financial Ombudsman has formally complained to the regulators that some lenders are "deliberately trying to obstruct the Ombudsman process". They have been rejecting 100% of all cases initial requests for a refund, even though they know that if they get to the ombudsman processes 90-100% of cases are adjudicated in the consumers favour.
This is done to persuade people with lack of determination to not pursue the claim. This must be gone into expecting rejection at this stage, and understand its just part of the overall process.
Stage 2, Now threaten the Ombudsman
Send a letter back that encloses a copy of your original letter indicating you are not happy and you would like the lender to review the case again. You should also state in your letter that if they do not agree you will make a formal complaint to the Financial Ombudsman Service.
If at this stage you have been offered an settlement amount and it's not high enough to settle your claim, there is nothing stopping you from writing back to your lender informing them the amount that you would accept 'without prejudice' to settle your claim. This means if the lender does not agree they cannot use the letter against you in the future.
Stage 3, If all else fails complain to the Financial Ombudsman Service
If you still haven't reached a satisfactory conclusion, the next stage is to make a formal complaint to The Financial Ombudsman Service; the official independent service for settling disputes between financial institution and companies and their customers.
The Financial Ombudsman Service is free to use, and will adjudicate whether your claim should be paid out, it will look at your case and decide if the PPI policy was sold unfairly or unreasonably. It can only do so once eight weeks have lapsed between the original complaints, unless your lender suggests you go to the Ombudsman.
To make its decision the Financial Ombudsman Service will look at each case individually, if its a matter of you saying one thing and the lender disagrees, The Financial Ombudsman Service will decide if it thinks the lender acted fairly. As the party with responsibility to provide full details of the insurance, the lenders are expected to have more evidence on what happened to back up its case.
Currently, cases that go to the Financial Ombudsman Service two thirds are being awarded in favour of the complainant or consumers favour, even if your case is not awarded there is no penalty for losing.
To make your complaint contact the Ombudsman, and ask it to take on the case. You can do this one of two ways either via the Financial Ombudsman Service Website or by calling 0207 964 0500. After contacting it, you will need to fill in a and sign a copy of the complaint form and enclose copies of any paperwork backing up your case.
The Financial Ombudsman Service will then send you a confirmation letter to say it will look into your case and get back to you if it needs any more information. Sometimes this will take a long time, usually around 6 months but maybe even up to a year, The Financial Ombudsman Service will resolve your complaint and will contact you with any offers from your lender.
Stage 4, When the Ombudsman Can't help
The Financial Ombudsman Service can only be of assistance with companies regulated by the FSA. While all PPI sales from January 2005 are regulated by the FSA, some policies before January 2005 are not.
Bank Sold Policies
Any provider that was regulated by the FSA prior to January 2005 will be covered by the Ombudsman. That means all bank and building society loans and credit cards should be fine.
Other Sellers
If you got the policy before 2005, and the provider wasn't regulated by the FSA before that, Such as Hire Purchase agreements and some Car Dealerships, then the Ombudsman has no jurisdiction, and would not be in a position to help, You should always contact the Ombudsman to check first.
In general, if this happens, the Financial Ombudsman Service will put you in touch with either another organisation or trade body that may be able to deal with your complaint; someone like the Finance & Leasing Association or Association of British Insurers.
This does make getting a claim settled more difficult, but is still worth pursuing.
Option 1: Use a Claims Handling Firm
Claims Handling Companies
If you are in this situation, reclaiming as we say above, is more difficult, the DIY route may no longer be an option, The Citizens Advice Bureau may be able to help somewhat, but in general you will have to look at one of two other routes...
There are a number of companies that offer a PPI reclaiming service, they charge a fee to do this.
Never pay a PPI claim company a penny, and try not to agree to one that will take more than a 25% fee from the claim compensation. All claims companies must be regulated for claims management activities and will have a reference to check on the ministry of justice database, avoid anyone not on this list.
Get A Lawer
The alternative is to enrol a local solicitor to take on the case in a "no win no fee"
If you are going to instruct a lawyer make sure you discuss fees beforehand and compare it to the maximum claim you can expect to receive.
Option 2: Take it to court yourself
There is also a valid option of taking court action against the provider via the small claims system. The claim is generally on the grounds that it has misrepresented your contract if it did not give you the full facts about the product or ask for all the required information.
