The main purpose of purchasing any policy is that it can save you in the nick of time when needed. Since the 1980’s, Payment Protection Insurance (PPI) policies have been sold (or rather mis-sold) on an almost industrial level in the UK. They have been sold along with:

  • Mortgages
  • Loans
  • Car finance
  • Credit cards

At some point banks started to realise that PPI policies can turn out to be highly lucrative for them. This is when they started using mis-selling strategies to sell PPI alongside other policies.

ppi - payment protection insurance for plevin ruling

 

PPI has been the most talked about topic in the media and the banking sector for a while now, as it is widely considered the greatest mis-selling scandal to ever hit the UK insurance industry and the culprits involve some of the biggest names on high street.

Lack of adequate knowledge about the policy and its application amongst the public was the biggest advantage of the banks, which they duly exploited. Considering the blowback that we have seen for PPI over the years, it is a safe assumption to make that a vast majority of people were unaware of even being sold a PPI policy.

If by some miracle you have managed to insulate yourself from all things PPI and are now worried that you have to make a claim before the deadline, but have no idea about how to start your own claim, don’t worry. This guide will have you covered and up to speed.

Emergence of the PPI Mis-selling Fiasco

So, our story starts in the early 1980s, PPI was a new financial product introduced by banking organisations, which looked like it covered a specific area of need in the insurance market. We know now how the story ends, but let’s try to understand how PPI policies were sold initially. Basically, payments for PPI policies were done in two ways:

One-off Payment

A one-off payment is a term linked with loan facilities. There were some financial institutions and banks that would include an extra amount along with the actual structure of loan. This means that interest was charged on a premium, which consisted of that additional amount.

The range of premiums varied for each individual. It depended on the duration of the policy and the length of the cover offered by the policy. For example, if you were taking out a loan of a particular amount, you would have been charged in the range of 15-25% of that amount as premium, which made PPI an expensive financial product.

In reality, many people were charged 25% to 40% instead of the usual 15% to 25% premium on their loan amounts.

Charged Monthly

There were some lenders who allowed their customers to pay monthly premiums. Often, this was found on loans and mortgage facilities, which were huge profit earners for PPI lenders. Such monthly premium payments were usually charged on credit cards or store cards.

When it comes to cards there is a prime limit affixed to it. If you borrow an amount near to that on a monthly basis you are liable to pay huge PPI premiums each month. For instance, if your PPI premium was £3 per £100 and at the last day of month your balance was approximately £1000, your lender can charge you £30 as PPI premium.

Credit cards were the prime source for such monthly premium payments, as the majority of cardholders might not even bother to check their credit card statements on a frequent basis. You should at least know the minimum or over-minimum payments of your card.

Many lenders when selling PPI policies capitalised on this ignorance. The obvious outcome was that those who failed to keep a constant and accurate check on their credit card transactions had to bear its consequences.

PPI in reality is not necessarily a bad product, as it provides cover for loan or mortgage payments when a person is incapacitated due to:

  • Unemployment
  • Accidents
  • Illness
  • Death

The biggest flaw of a PPI policy was that it was extremely expensive. Also, for an inherently expensive financial product, PPI offered protection for only a limited period of time. Only policyholders who unexpectedly passed away were entitled to full pay-outs.

PPI policies also had a lot of exclusions that were in most scenarios not explained to the customer. For example, PPI policies were in many cases sold to self-employed people who were always going to be ineligible to claim from it.

Similarly, a customer would have only been able to claim from a policy on the grounds of unemployment if they were employed for a minimum period of three months. If the policyholder was unemployed going in, there was no way they would have been able to claim from their policy.

You are probably wondering that if people were unable to claim from a policy, why would they bother buying it in the first place? The answer to this is simple. Customers were often unaware of having a PPI policy in the first place, as it was sometimes added on to their loan or mortgage agreements without prior consent.

Many customers were not given adequate explanations of the exclusion criteria of a PPI policy by sales agents who were highly incentivised to sell more and more policies. All this ultimately led to a great number of duped customers in the UK, which is the main reason why PPI compensation figures have risen past the billion pound mark.

Let’s now try to understand some of the common mis-selling tactics employed by banks to push the sale of PPI policies.

Five Mis-selling Tactics Used To Sell PPI Policies

Lenders have applied numerous tactics during the span of 1980-2009/10 on victims and in many cases unknowingly tricked them into buying a PPI policy. There are multiple tactics that lenders have resorted to, for selling policies to customers. The following list can help you know whether you are a victim or not.

Your Work Status

It is important to know your work status when you to took out the policy. As mentioned before if you were self-employed or unemployed at the time of taking out the policy, you were essentially sold a worthless policy.

So, the first thing you have to do is check whether the policy protects you against unemployment or not. According to records, most PPI policies list unemployment as an exclusion and if yours did too, it was of no practical use to you.

This clearly indicates that no enquiries were made regarding your work status when the policy was first offered to you and that it was sold with the knowledge that there was a chance you were never going to be able to claim from it.

This means that you were mis-sold and that you have a great chance of claiming back your premiums along with the interest you paid on it and compensatory interest that a court would have awarded you for being mis-sold PPI.

Generally, PPI policies have a specific upper age limit. This means that an individual cannot be sold a policy if they are above that particular age and if such a situation applies to you, it is possible to bring forward a claim. Additionally, if you have passed the age limit while paying for the policy you can also apply for a refund.

Medical Condition

Were you sold a PPI policy when you already had pre-existing medical issues?  Most insurance policies tend to exclude pre-existing medical conditions, as you are already suffering from a medical problem and are likely to claim more often.

In case you were not asked about your medical history there is a high possibility that you were mis-sold PPI.

If you were not informed about terms and conditions of the policy, you are due a payout as you were mis-sold a policy for which you would have been ineligible to claim on.

ppi - payment protection insurance for medical conditions

There are some policies, which may pay on your behalf if you have been free from any symptoms for a specific period. If you happen to be in a similar situation the chances of proving mis-selling goes down.

To be on the safer side it is important to refer the terms and conditions mentioned in your policy. This will give you a clear picture of whether you have been sold or mis-sold PPI.

PPI Is ‘Compulsory’

There were some firms (or brokers) that mis-sold PPI to customers by implying that taking out PPI was mandatory to getting approval for their loan or mortgage application. If you were put in such a situation wherein you felt compelled to buy the cover, you have grounds to make a PPI claim, because you were a victim of mis-selling.  

If you have bought a PPI policy after 14th January 2005 and if it was strongly suggested to you that taking out PPI increased your chances of approval, you have been subject to a case of ‘advised sale’. However, it is important to look into the details of the policy and check whether the policy is actually beneficial to you or not.

Sold Insurance

Before May 2009, PPI policies were sold in form of single premium cover wherein the cost of your insurance was added to your loan or financial agreement. Additionally, you were compelled to pay dual interest on your PPI policy as well as the loan amount.

The duration of single premium policies is usually for five years. There have been instances where the loan duration exceeds the duration of the PPI policy and individuals were not told that the PPI policy didn’t cover them for the entire loan period. If you were sold PPI under similar circumstances, you have the right to apply for a claim.

If you had made a joint application for a loan or mortgage and only one member is covered in the PPI policy, you can make a claim for mis-sold PPI.

Completely Clueless

There are a countless number of cases where people have bought a PPI policy without even being aware about it. Many instances have been reported wherein PPI sales staff included PPI in a loan application without informing the customer about it.

Similarly, if you filled out your application online and the box for PPI was pre-ticked, meaning that you had to manually opt out of it, you are eligible for a claim for refund.

So, get out your box of documents and start sifting through them to check if PPI was added to your agreement without your knowledge. If you notice PPI, it’s time to make a claim and get all your money back.

Why Should You Apply For a Claim of PPI Refund?

People who were already aware that they were mis-sold a PPI policy started claiming for refund once the whole PPI scandal came to light.

Recent statistics show that banks have paid out over £26 billion to victims of PPI mis-selling.

As the PPI claim deadline looms, the reality is that many people have yet to claim for PPI policies mis-sold to them.

If you are among those who have not yet brought a claim forward, maybe the following factors will motivate you enough to do so:

No Harm in Checking:

Not many people can say no to thousands of pounds, and that’s how much you could be eligible for via a PPI refund (the average payout for PPI currently stands at £2750). So ask yourself this, is there any harm in checking?

If you have doubts about the complexities of the claim process, then rest easy. After years of mishandling PPI claims, the Financial Conduct Authority (FCA), through various fines and penalties have forced lenders to play ball by implementing an easy claim process.

If you are still worried, you can always give us a call and let our experts guide you through the entire process.

It is Not Something You Asked For…

It is very plausible that you intended to take out a PPI policy and you were still mis-sold. If you were sold the wrong kind of policy or if you were not informed about all the terms and conditions, which made you eligible for a claim, you could have been mis-sold the policy.

As you were not informed about the complete policy and various other terms and conditions involved, it is counted as mis-selling.

For instance:

  • Some PPI policies comprise of exclusion clauses for specific pre-existing medical conditions and if this was not mentioned to you, it’s considered as mis-selling.
  • Many policies were sold to either self-employed or unemployed customers who were ineligible to claim from it. PPI policies were also sold to people suffering from existing health woes who would have been unable to claim from it.
  • At times, policies attached to a loan were single premium policies where they clearly mention the charges involved, but fail to mention the duration of cover. For example, it is possible that you were charged interest for the entirety of your 10-year loan but it was not mentioned to you that PPI provided cover only for the first five years.

Such practices were very prevalent and extremely beneficial for lenders as they earned huge profits through the sale of PPI policies.

You Didn’t Know That You Were Paying For It

PPI policies were not just restricted to loans and credit cards but were also provided with mortgage, secured loan, catalogues, store cards and other finance plans like purchasing a car.

There is a small but very possible chance that you have been sold PPI with another policy. You might have never realised that you were paying for both until you started calculating and got the shock of your life. Take a look at your credit card statements for mention of PPI payments.

Just Because Your Account Is Closed, it Doesn’t Mean You Can’t Claim For a Refund

If you are worried about being ineligible for a claim just because your account is closed, then don’t be, you can still bring forward a claim as long as there is evidence of you making PPI payments.

It is Your Right

The biggest reason for claiming back PPI is that in essence you are asking back for money that was taken away from you without your knowledge or consent. Your trust in the firm while applying for a loan, credit card or mortgage was exploited.

You were unnecessarily and most likely intentionally put in a situation where you incurred personal losses. It’s time to get back what’s rightfully owed to you.

Let Your Voice be Heard

Applying for a claim also indicates that you are aware that a particular financial institution or bank has broken your trust and manipulated you into paying for a policy through unethical or underhanded practices.

By making a claim, you are making a stand that such practices are unacceptable and who knows, in the process you might inspire many others to get back money rightfully owed to them.

PPI Claim Process Is Simple:

Ignore anyone who says that making a PPI claim is complicated, it is not, at least not anymore!

Experienced and successful, at 3DM Legal we ensure that all our clients go through a streamlined and smooth reclaim process.

We minimise hurdles that banks or other financial institutions may create in the way of our clients. We make it a point to collect strong evidence against the lending institution in form of payment receipts and credit card statements.

Sometimes people are concerned that claiming for a refund may impact their credit score or future prospects for a loan, credit card or mortgage. The truth is that it actually does not have any effect on your future financial goals.

In fact, by recovering your money, you can possibly invest it elsewhere or pay off your current debts, securing your current financial situation in the process.

How Long Does the PPI Claim Process Take?

Ever since the PPI scandal began to unravel, claims started pouring in from customers who were mis-sold PPI policies. Initially the claim process was not at all straightforward and there are many reasons for this:

  • Firstly, banks themselves were not exactly motivated to pay out refunds even to eligible customers because the scale of mis-selling was such that once they started paying out, the compensation payments were projected to exceed billions of pounds, which has now proven to be the case.
  • The scale of mis-selling was so huge that claim handling teams were simply too overwhelmed to deal with each case fairly, leading to many legitimate claims being rejected out of hand and then being subsequently overturned by the Financial Ombudsman Service (FOS).
  • Many a time claims were rejected outright or claimants were involved in tedious time consuming claim processes. Many lenders believed that a proportion of complainants would not return once their initial claim was rejected. Similarly, putting claimants through tedious claim processes led to many giving up and not pursuing their claim further.

But today, after numerous fines issued by the FOS and the FCA, banks are starting to play ball, streamlining their claims process.

This does not mean that the claims process isn’t time consuming. Sometimes it takes just a single call or a written application for a bank to refund a customer, but in other cases the claim goes through various stages before it is accepted or rejected.

Let’s try to understand the general time framework for a PPI claim here:

Acquiring Information (approximately 40 days)

It is possible that you don’t have a copy of the loan, mortgage or credit card agreement on which you could have possibly made PPI payments. No need to panic! You can request your lender to send all information regarding previous agreements to you or we can do that on your behalf.

If you had taken out more than one loan or credit card during the PPI mis-selling timeline, request information about all those accounts. This will help you verify if PPI was mis-sold to you on more than one account. There have been numerous instances where lenders have paid out to customers for PPI held on one account, when they were also eligible for PPI compensation on other accounts. Make sure that this does not happen to you.

Making a claim through an experienced firm like ours will mean that the headache of dealing with the intricacies of your case is left to our specialist team. As we have been in the claims business for a while, we’ve established close relationships with many banks, which makes the process of procuring information easy and faster for us.

If you opt to register your claim directly, it’s important to remember that it often takes up to 40 days for banks to revert back to your request (not always though!).

Case Launched (8 weeks)

When the lender or bank receives a complaint, their job is to complete all the formal legalities involved in the process of a mis-sold PPI claim. They then have to issue a concise final response on the case within a span of 8 weeks.

Some lenders carry out this process quickly, ensuring that you don’t have to wait for too long, but some drag their heels, taking up the entire time duration to revert back with their reply. Dragging the process has been known to work as many claimants simply lose hope and give up, not pursuing their claim any further.

Many banks have been penalised by the FCA for the use of deliberate delaying tactics in resolving PPI claims.

Receiving Compensation

Once the process is completed, and your bank finds the results in your favour, an offer will be put forward to you that will detail your compensation amount. If you are satisfied with the offer put forward, and the final compensation amount, you will be refunded either by cheque or direct payment.

Even though most lenders claim to make the refund within 28 days of the complaint being upheld, like all other things related to PPI, expect a delay. 8 weeks is a more accurate time span within which you can expect your payment.

Time Frame for a Complaint to be Upheld or Rejected

Usually, a lender will uphold (or reject) a complaint within a month of it being issued. But, there is no specific period applicable for lenders within which they need to come to a decision, although if the complaint has been upheld, the compensation payments need to be made immediately.

What If Your Claim For PPI Refund is Rejected?

If the past is anything to go by, there are high chances that a valid complaint for PPI refund might still be rejected.

As mentioned before, banks have been known to use many tactics to dissuade people from taking their claims ahead and just because many have been penalised before, it does not mean that such tactics are still not being used on a smaller scale.

Approximately, 9 out of 10 claimants retract their complaints if they are rejected once. If you are looking to make a complaint by yourself, then keep reminding yourself about not backing out. It’s your money, stay the course and you will get it back. If you feel that such tedious processes are not for you, get in touch with us and we will handle it on your behalf.

Independent government bodies like the FOS can also be approached if your claim has been rejected to investigate and review your complaint further.  

Claim for PPI Refund: The 3DM Legal Way

Now, the easiest way to avoid a hassle-free claim process is to first ascertain that you have in fact been sold PPI in the past. And here’s where we can help make your claim stronger.

Use our free PPI check to be sure about whether or not you have been sold or mis-sold PPI in the past. The process is simple to understand:

Check if You Have PPI:

We will submit a request to your lender for information about PPI on loans or credit cards taken out by you previously. The lender will usually respond within 40 days of initial contact.

Confirmation of PPI Policies Found:

Once the lender reverts back we will be able to ascertain whether or not you have been mis-sold PPI and the options available to you going forward.

The Next Step:

If you are not a victim of mis-selling the process ends here for you. On the other hand, if you were mis-sold PPI, you can either choose to go ahead with the claim yourself or you can let us handle it on your behalf.

Our experts will ensure that all the necessary paperwork and documents are kept ready for your claim to be processed in a smooth and timely manner.

Facts About PPI Reclaim

Lack of general awareness means that there are a lot of misconceptions regarding PPI policies and the entire claim process. Here we provide some general facts relating to the claim process that everybody should be aware of:

Number Of Policies Sold:

According to recent statistics, approximately 53 million PPI policies were mis-sold by banks and other financial institutions. Of these, around 45 million policies worth well over £44 billion were sold by some of the leading banks in the UK.

These statistics show that many customers are yet to come forward with their claims, and the deadline imposed by the FCA is an effort to ensure that there is no more procrastination amongst customers who were mis-sold PPI.  

Initially, the FCA estimated that only 3 million people were affected by mis-sold PPI policies. A high proportion of these customers have received compensation amounting to £24.2 billion for mis-sold PPI, so far. With the deadline approaching more and more individuals are coming forward with their claims for refund amidst fears of missing out on it altogether.

  • Have You Been Plevined?

A landmark Supreme Court judgement means that there are new grounds for making a PPI claim and thousands of previously rejected claims can be reopened. This is known as the Plevin ruling.

To give you a brief overview, Susan Plevin, a retired lecturer, took legal action for mis-sold PPI against Paragon Personal Finance. During her claim, it was discovered that 71.8 % of her PPI premium was taken as commission by Paragon, the credit broker and the provider of the PPI.

Plevin argued that although she had bought PPI, she was not made aware of these commission levels and therefore she demanded return of the full premium along with the interest as compensation.

In 2014, the Supreme Court agreed with Plevin and ruled that if a PPI seller failed to disclose that it had received a large commission from the bank or product provider, the sale was unfair and the customer is bound to be compensated fully.

Start Your Claim ASAP

If you believe there is a possibility that you might have been mis-sold a PPI policy in the past, make sure that you think about reclaiming as soon as possible. You need to gather relevant data and documents, which can help you to carry out the process more swiftly or at least with minimum hassles.

Some claims take a longer duration to resolve, so it is important to apply for your claim early and not get caught up in the backlog all the last minute cases that are likely to pile up, now that there is an official deadline.

Forgotten About Which Lender You Used?

It’s possible that you know that you have had PPI at some point in the past but are unaware of who the lender is.

No need to panic. Check through all your previous loan, mortgage or credit card documents. If you have had multiple agreements with different lenders, these documents should help you realise against which lender you have a legitimate claim for PPI refund.

It is also possible that you don’t find PPI in an old agreement because it’s hiding in plain sight. Also check for terms such as payment cover, protection plan, ASU, loan protection, retail payment protection, loan care or something similar. If you find one these terms in an old agreement, it means that you have taken out PPI in the past.

You can also list down the names of lenders by preparing a list from whom you have borrowed so far.

If you remember the lender but don’t have a copy of your agreement, you can just ask your lender to send a copy of the original agreement to you, which clearly mentions all terms and conditions of the policy.

What Happens if My Bank/Lender Who Has Mis-Sold PPI No Longer Exists?

Some people that have been mis-sold PPI policy give up on the thought of making a refund claim knowing that their Bank/Lender no longer exists. While in reality, there is still a strong possibility to make a claim even if the Bank/Lender that mis-sold you the PPI policy no longer exists because its been acquired by another company. In most cases, the new company becomes liable to clear the debts and credits of lender/bank that owe people refunds.

This means if you are liable to receive compensation from a bank or lender that had mis-sold you PPI, but your original lender has been taken over, you can possibly obtain the compensation from the new owners.

However, it completely depends on the merger and acquisition policies specific to a company insinuating that only the previous company has to pay off the debts. A good rule of thumb is to send a letter to the new company as they can specify whether you need to still contact your old bank/lender or if they will handle your complaint and carry out the process further.

An example is the Eggs credit cards and Barclaycards merger. Since Barclaycards took over Eggs credit card, they became responsible for all their mis-selling PPI policies and other liabilities.

In case your bank or lender has gone bust, you can contact either the FCA or seek assistance from a CMC like us, as we can suggest to you the way forward to reclaim your money.

This will ensure that you are directed to the right person, allowing you to follow the correct procedure depending on your situation. The first step to get started is to figure out if you have been mis-sold a policy before and you can do so by running a credit check. There are some online portals, which can help you to obtain this report although they may charge you for it.

This credit report encompasses any loan agreement details and the terms specified in these agreements over the past six years. You can also ask your lender/bank to pass on any important details of the agreement that they have, if any. It is better to check them once from your end as there is a possibility that they might have changed the terms and conditions of the loans over a period of time.

Figuring out and making a claim of refund can be a bit tricky for people who have been mis-sold policies in the late 1980’s. This is because it is extremely difficult to trace back details in the credit file dating back to the 1980’s.

The only tangible option available to them is to contact the bank/lender or the financial institution and determine the precise terms and conditions of the policy sold to them.

According to a research in the first half of 2017, the compensation figures from banks and financial institutions have crossed the £26 billion mark.  Furthermore, FCA has launched an advertising campaign with an objective to inform the public about mis-selling of PPI, claim process and the deadline being 29, August 2017.

The reason why we are emphasising more and more on finding out whether or not you have had a PPI policy on any financial product is the high possibility of you being mis-sold a PPI policy masquerading as something else.

Let’s consider a real incident where an individual took out a loan for building their dream house. In this instance the loan applicant was charged a staggeringly high price as compared to normal price of a loan. It was later found out that they were charged for a PPI policy in addition to the loan.

PPI complaints have been doing the rounds since over a decade and banks have been compelled to compensate the victims due to the pressure from the FOS and media. The backlog of complaints and the approaching deadline has resulted into a lot of policyholders being eager to know whether their bank has agreed to compensate them or not.

How Much Am I Entitled To Receive via PPI Refund?

There are multiple factors, which need to be considered to ascertain your refund amount for the mis-sold PPI policy. Of all the variants, the type of financial product with which PPI has been associated is a major factor in determining your refund.

This means that your refund amount differs depending upon whether you were mis-sold PPI policy along with a loan, mortgage, credit card, car finance or some other policy.

Below are some of the factors that govern the amount of refund that you may be entitled to:

Loan PPI  

If you are someone who has been mis-sold a PPI policy along with a loan the compensation amount is estimated by considering the repayments that you made within the specified term.

The prominent things to consider are monthly premiums on the loan, number of payments made and proportion of the loan repayment that relate to PPI.

The Way PPI Was Sold To You

You may have purchased a PPI policy unknowingly if the lender mis-sold it you. If you fall under this category of claims, you are entitled to recover the complete amount that you have paid for PPI along with an additional interest. This interest is actually calculated at 8% per term.

The chart below should give you an idea about how it’s calculated:

Monthly Loan Payment (In Pounds) Number of Monthly Payments Estimated Compensation (In pounds)
100 12 187.80-313.00
100 60 1059.90-1766.50
150 12 281.70-469.50
150 48 1249.65-2082.75
200 30 993.00-1655.00
200 60 2119.80-3533.00
250 18 717.75-1196.25
250 36 1516.50-2527.50

 

This refund majorly is based on the payments you have made related to PPI premiums along with the additional interest.

The above table is to be referred only when you have been mis-sold a front-loaded single premium PPI policy. In case you have purchased a regular payment PPI policy, you are likely to pay the difference amount between what is usually paid for a single premium policy and cost of the regular payment PPI policy.

Credit Card PPI

Compared to other financial products, it is difficult to calculate refund for mis-sold PPI policy on a credit card. This is due to the fluctuating balance in your credit account.  Generally, credit card PPI is charged on a monthly basis and is based on the proportion of balance in your account.

You can check your credit statements, as that might indicate if any significant deductions for PPI have been made. Once certain about being mis-sold a PPI policy, the fundamentals of refund remain static which means the amount you paid for PPI is paid back to you along with the additional interest.

Have You Refinanced?

It is also necessary to find out if you were mis-sold a single premium PPI policy that was later on terminated to refinance a connected loan. If you belong in this category, then your compensation amount will be affected by this cumulative mis-selling.

There have been numerous instances in the past wherein mis-sold policies have been turned into a subsequent loan, which actually comprises of PPI. In such instances there are chances of multiple policies being involved in one agreement. This means that if you have re-financed on several occasions, you are likely to own a mis-sold policy and are eligible for compensation.

The additional simple interest has been fixed at a rate of 8% per annum by the regulators and it is considered as compensatory interest. This fixed rate ensures that amount of interest paid on each successful claim can compensate the cost of the original policy.

Individuals sometimes find it hard to calculate their compensation amount with premium amounts and number of premiums involved in it.

Due to the complexity of the calculation, a lot of victims rely on the banks to calculate their refund amount. Blind acceptance of the bank’s calculation has often led to many claimants feeling short-changed.

In the past there have been instances when claimants have received a lower compensation amount then what they were actually owed. This mainly occurred as the lenders stated that they just sold the claimants a wrong policy instead of actually accepting that they mis-sold a policy to them. As mentioned before this tactic is known as comparative redress.

For example, if someone was entitled to receive £1,200 as compensation, they were offered only £700 and the rest, £500, stayed with the lenders, as a result of comparative redress being applied.

Remember, comparative address can only be applied if there is proof that the claimant would have opted for the other PPI policy if they were made aware about it. It can’t be applied just so that your lender has to pay a lower refund amount.

What if I don’t have paperwork?

The biggest challenge that many encounter when applying for a claim is not having the adequate documents signifying the presence of a mis-sold PPI policy. There are also individuals who have forgotten their account number, which can be a hurdle during the claim process.

In essence, if you know your account number the process of claim becomes simpler as compared to when you don’t know.

However, with several alterations in the process of reclaiming PPI over the years, this is no big challenge for a firm such as ours.

What Do You Actually Need?

Primarily there are two ways through which you can actually apply for a claim without an account number or paperwork. The first method is the simplest one and it just requires your complete name and address history.

Along with this information, the only other thing you need to provide is the name of the bank that you suspect of mis-selling PPI to you.

Once we get your entire name and your bank name, it becomes easier for us to get it checked through their database and trace your account number. This database will help us to trace all the types of loan, credit card, mortgage or any credit agreement that you have had with the bank. This data will help us determine if you have the requisite grounds for a PPI claim.

We can even take this a step ahead by searching your data in other sister companies along with the one mentioned by you, if in case, you have any agreement that comes under the umbrella of the same parent company.

If you apply for a claim on your own, you need to provide a specific account number, which you actually wish to claim on. You can request your bank for details regarding any account you held with them within the last six years. You can also check your financial history via a credit report.

Can I Still Make A Claim For PPI Refund In Absence Of Other Relevant Paperwork?

Yes, you definitely can apply for PPI claim even if you do not have all the paperwork with you.

In this scenario, you need to run a credit check on yourself. There are some really good service providers who can offer you an accurate credit check. This is a lengthier and more time consuming process, but it offers you valuable insight. Moreover, you do not have any other option if you wish to avoid the involvement of any third party.

Paperwork and account numbers are important but not compulsory. Only few people are organised to such an extent that they have the last 6-10 years of data and documents safely along with them. In most cases, name and postal address is more than enough to obtain details about your loan.

Also, at times, original loan, credit card or mortgage policy are not linked with a PPI policy. This makes it more difficult to trace back the PPI policy attached to the original financial product but it is still possible to find it with the right helping hand, some additional research and efforts.

You have to be patient enough through the entire claim making process because it may take some time. But if you follow the right process, eventually, you will acquire compensation that you are rightfully owed.

At any given point, if you are unable to figure out where your money has gone in the past 5-20 years, do check your investments and payments papers or run a free check from our site.

Through this review, you can check about all the loans, credit cards, mortgage, car finance or any other financial involvements that you have had in the past, which hint at the presence of a mis-sold PPI policy.  

What if Your Claim is Rejected?

It was recently reported that, as of today, PPI claims of more than 1.2 million people have been rejected by their respective banks and lenders. This is quite a staggering number and enough to bring down the wealth of all the UK banks by another few billion pounds.

It is also possible that you may have paid several premiums and paid for the entire policy and instead of being rewarded with a refund you were informed that your case had no merit.

But it shouldn’t discourage you from making a claim again. If a bank has rejected your claim it doesn’t mean that you were not mis-sold the policy. Many individuals begin to doubt the credibility of their case, simply because the bank has rejected it outright.

But as we have reiterated many times before in this guide, banks commonly used delaying tactics, until they started being penalised for it.

You may have read this in the newspapers that banks have resorted to unethical practices such as paying a claimant much less than what they are actually owed. The fact that 1.2 million individuals are now planning to file a claim once again shows the level of distrust among the citizens of UK towards their banks.

There have been several instances in the past wherein people have submitted all the required documents, which prove that they were mis-sold the PPI policy, but still their claim was rejected.

If your claim has been rejected or you believe that you haven’t received the right refund amount that you are owed, you can contact the FOS but there’s still a better way to handle this matter.

And this involves letting a CMC file a PPI claim on your behalf. Such companies go to great lengths to determine how you were mis-sold the PPI policy and in this way build up a stronger case that is difficult to turn down.

All we expect from our client is that they give us the necessary documents and from that point we take things into our own hands and their stress will be ours to handle. It shouldn’t be the case that your application has arrived at the FOS doorstep but it not supported with the requisite documentation.

In such a situation even the FOS may ask you to go back and get the required documents first that can conclusively prove that you were mis-sold the policy.

Therefore it is advisable to take a little extra effort at this stage and gather every bit of evidence that you need so that there is no inconvenience to be faced later on. It is also recommended that you do not approach the FOS right away after you realise that your claim has been incorrectly dealt with.  

Take your time and collect whatever you think can be counted as supporting documents for your claim. You have six months from the date of rejection of your claim to pursue it further with the FOS.

Can I Make Another Claim?

PPI has caused such confusion and panic that it has become natural for people to have doubts. From understanding whether or not they have PPI attached to their bank accounts to how to go about making the claim, there is always some level of guidance needed to help them do it the right way.

If you believe that you have been making payments for a PPI policy and despite making a claim if you feel that justice has not been meted out to you then we can help you get it.

Many cases have now surfaced wherein the claimant was previously denied the compensation but was given a refund the second time they filed for PPI refund. It is possible to make another claim even if your last attempt was unsuccessful.

Is There a Deadline For This?

The financial watchdog has decided to place a deadline on acceptance of PPI claims and it will be enforced from August 29, 2019. There is still plenty of time for it so if you feel that you could have been mis-sold the policy, then this is the ideal time to make a claim.

This is the general deadline, which has been imposed on all PPI claims. If you have already filed an application and your claim has been turned down, and you have are contemplating about filing another application, then remember that you need to file for reclaim within six months from the date of receiving the bank letter.

Generally, the application should go through within eight weeks but the process could take longer and therefore there should be no further delay in making your claim.

What Are the Common Reasons Behind a PPI Claim Rejection?

As mentioned before the banks are leaving no stone unturned to reject as many claims as they can. To say that the whole PPI fiasco was a nightmare for the banking industry would be the understatement of the century and the declaration of a deadline means that the bleeding can finally stop in the form of compensation for mis-sold policies.

However, the banks are not always at fault when a claim is rejected.

It is also possible that a claimant did not/could not provide some crucial information without which it is difficult to prove that they were indeed mis-sold the policy.

If the of PPI mis-selling is strong and indisputable, the chances are high that the claim will go through. All you need to do is be in regular touch with the bank authorities and take necessary guidance from those who have successfully made a claim.

There are three basic steps that you can follow in case your claim gets rejected:

Step #1:

If you feel demotivated by the rejection of your claim, gather additional firepower with you when you are disputing it via an appeal. That’s where we come in. We can help you to determine the main reason behind the rejection of your claim and how you can take things further.

Wasting time in contemplation as to whether you should apply for a claim or not will not help you to recover your lost money and will only delay the process further.

Instead, if you contact us we can help you to figure out where exactly you stand with respect to your claim. You will also be provided further information about the process and this should relieve you of a lot of stress.

Step #2:

The next move is to make an appeal. We will evaluate your claim and come up with a specific game plan to take it ahead. We will pick up major clauses that were wrongly applied to your case and highlight factors that can work in your favour and signify that you deserve a refund. We have also handled cases wherein we had to directly approach the lenders, banks and the financial institutions for an appeal.

Step #3:

We usually prepare our clients for the possibility that it could take up to 18-24 months from the date of appeal to receive the refund. Why is it so time consuming? This is because the number of claims has increased tremendously ever since the deadline was officially declared.

This increase in number of claimants is the main reason why the entire process is so time-consuming. Until and unless the adjudicator reaches a verdict the lender cannot reject your claim but is also not responsible to pay you any refund.

The only option you have in such a scenario is to patiently wait for the appeal to reach an outcome.

The sad part about this situation is that the FOS has not been able to keep pace with the number of complaints they have been receiving ever since the deadline was officially declared.

Moreover, it has become difficult for them to manage every individual account and update them with their latest alterations. This is exactly where our firm can help you, as we possess the required manpower that can multi-task to maintain records pertaining to your case.

All you need to do is take our free PPI check and this way you will gain greater clarity about whether you have been mis-sold PPI policy in disguise with some other loan, mortgage or credit card or not.

Do You Need to Pay Tax on Your PPI Refund?

Quite often the first question that comes to minds of those who hold their PPI refund compensation cheque is whether they are obligated to pay tax on this money. If you are a taxpayer, you are legally responsible to pay tax on your compensation as well.

Tax is not charged on the entire sum which means only a part of your compensation will be taxed. There are three components to the PPI refund compensation that you have received. The money paid as premiums, any interest if paid and 8% compensatory interest.

The interest that you have received is the component that is taxable. This interest should be clearly specified in your self-assessment tax return.

ppi - payment protection insurance for tax

 

You should also verify the calculations that your bank or lender has applied in order to arrive at your refund amount. Do not neglect the breakdown of the calculation of your compensation amount as you won’t get another opportunity to check the flaws if there are any. Make it a point to clear any doubts regarding this matter without wasting more time.

Following are the important aspects that you must give attention to while going through your refund calculation:

Premiums

Remember to check the total number of premiums paid by you and if they have included each one of them. If these figures differ do not hesitate to put across your query and clear the doubt.

Interest

Interest plays a major role in your refund amount. As mentioned above, 8 % per annum is usually added to your compensation amount. This interest is calculated on the basis of simple interest. Ensure that it is calculated accurately and that you have received the entire amount. The interest is ideally charged on the net PPI premiums.

According to the laws of income tax, all interest you receive from a bank is likely to be taxable under the current rules laid down by HM Revenue & Customs (HMRC).

But there is hope that you may receive tax-free interest in the future as they are currently laying down the foundation for it. Until we reach this point, expect tax to be deducted from your compensation payment.

This amount is deducted automatically by the bank and paid directly to the HMRC. In the breakdown, your bank might show that 20% tax has been applied on the interest part of your final compensation amount.

It is advisable to keep copies of all documents and calculations pertaining to your refund just in case you need them for future reference. Keep them at a secure location so that only you or your close ones can access it.

You also need to inform HMRC about the interest. This will ensure that you are paying the right tax amount. For instance, if you fall under the category of the higher tax group say 40% then you will have to pay additional tax.

To put it simply, you may have to pay 20% tax on the interest in addition to tax already being deducted by your bank, as you fall under the class of higher taxpayers.

Once you complete your Self Assessment tax return, HMRC will look into all the details that you have provided. Based on these details they will determine how much interest you are accountable to pay.

How do you know if you have already paid tax?

Lenders generally disclose the actual refund amount to the claimants before handing over the compensation to them via an offer letter.

If you receive a refund amount that is lower than the amount you were promised then it’s possibly because tax has already been deducted from it.

On the other hand, if you are a non-taxpayer and your tax is directly deducted, you can claim a refund from HMRC. This will help you to regain the amount deducted from your compensation.

The tax deduction most probably depends on the situation of your case, nature of your compensation and the individual’s financial and tax position.

For example, if an individual is liable to pay income tax at a basic rate and the financial institution has not deducted the tax, that individual needs to inform HMRC about it and carry out the necessary formalities.

Moved Houses After Claiming For PPI?

Are you in a situation wherein you have moved to a new apartment and have claimed for a PPI attached to a product you had purchased whilst staying in your old house? Are you in a dilemma of whether you should provide your new address to the authorities or still continue to use the old address?

If there have been any changes in your claim form such as name or address then it is best if you get the application updated right away. If your records are up to date, it becomes easier for the bank to trace your records. In such cases where there is a likelihood of complications cropping up, it would be advisable to consult a CMC.

The truth is that it is entirely an individual’s choice whether they wish to consult a CMC or not.

However, clients tend to forget that each case is different and a common approach may not work in all cases. To put it simply, the level of complexity in each case varies and clients may worry about making small mistakes and what its consequences would be.

This is where our industry experience and knowledge can be of great help to you. We have handled several complicated cases and have successfully rewarded our client with the compensation amount they were rightfully owed.

The ultimate aim should be to get back the money you are owed. How you go about it, alone or with the help of a CMC, should be decided keeping in mind which way will give you the maximum chance of success.

The Deadline

You might be familiar with the fact that the FCA has declared a PPI deadline for all claims related to it. This means that all those individuals who are yet unsure or clueless about whether they have been mis-sold PPI policy should check their bank statements soon.

FCA has initiated an advertising campaign to spread awareness about the deadline. This campaign has been launched because millions are believed to still be unaware about any PPI policy being attached to their bank account. This will ensure that people do not lose out on their hard earned money due to a lack of awareness and rightfully claim what is theirs.

The campaign will be run on several platforms such as TV, outdoors, online and printed media. Arnold Schwarzenegger is now the popular face of the FCA’s PPI awareness campaign. If the Terminator tells you to ‘do it now’, you’d likely listen!

This campaign is being financed by eighteen firms primarily involved in the mis-selling scandal including some of the biggest names in the banking and finance sector. These firms have promised to minimise the hassle in the process so that the claimants do not have to struggle to receive their compensation. They are trying their best to make the process as convenient as possible by:

  • Offering online application for complaints
  • Uncomplicated complaint forms so that claimants can fill the form easily.
  • Offer assistance to vulnerable customers if and when they require any additional help
  • Providing free check-up for PPI policies

Reclaiming PPI can be a complicated process and therefore it is important that it is carried out in an organised manner.

 

 

Lastly, it is about seeking the right assistance at the right time so that you receive what you are entitled to. It may be easy to feel discouraged looking at the lengthy claim procedure but it is worth remembering that putting in some extra efforts at this stage can make a lot of difference to your overall financial health.