FAQ’s

If you believe you were mis-sold PPI there is no harm in putting in a claim, simple fill in our claim form to start the process.if your bank does reject your claim and we believe you have been dealt with unfairly we can take this further and make a compliant to the Financial Ombudsman service.

FAQ
What is PPI?
Is every PPI policy bad?
When did PPI mis-selling start?
Is there a deadline I need to reclaim by?
Will they cancel my PPI if I reclaim it?
I’ve forgotten who my loans / cards were with, how can I find out?
My bank says I didn’t have PPI. Is there another way to check?
What name should I look for to spot PPI on the paperwork?
Will I have to close my account / lose my overdraft / be penalised if I reclaim?
Will reclaiming PPI hit my credit rating?
Can I make more than one PPI complaint?
Can I reclaim if I’m still paying off the loan?
Can I reclaim if the loan or credit card’s repaid and I’m no longer a customer?
I’ve had a debt management plan / IVA / been bankrupt, can I reclaim?
I made a redundancy claim but found my PPI won’t cover it, was I mis-sold?
Will I need to pay tax on my refund?

 

What is PPI?

PPI stands for ‘Payment Protection Insurance’. PPI is a Protection insurance sold to cover your monthly payments in case you have an accident, become sick or are later unemployed. PPI was sold on Secured / unsecured (personal) loans, credit cards and mortgages.

Yet it’s been widely mis-sold, and you could even have it without knowing. If you were mis-sold PPI, you may be able to reclaim £1,000s.

 

Is every PPI policy bad?

No. Payment Protection Insurance itself isn’t a bad product. But it’s been widely mis-sold with thousands of loans, leaving many paying hundreds for potentially worthless cover.

The insurance cost often dwarves the interest, so many believe it’s the most overpriced financial product around. Sales staff dressed as advisers were hugely incentivised to sell PPI whenever possible. Many were under so much pressure, they strayed far from the truth.

 

When did PPI mis-selling start?

There’s no specific start date – Claims can generally start on policies from the 1990s and possibly earlier. The financial regulator started fining PPI companies in 2006, but a big improvement in the mis-selling was not seen until 2011.

 

Is there a deadline I need to reclaim by?

No, you can complain about a product sold at any time, though here are some guidelines which may help. It’s easier if your insurance was active in the last six years, but this is not a decisive factor.
Insurance started in the last six years: There’s no issue here at all. Even if the loan is now paid off, you can start a reclaim.
Older insurance that’s still active, or ended within the last six years: You can start a reclaim. The six-year rule applies to active insurance, so a policy taken out 12 years ago but paid off five years ago was still active within the key six year period.
If your policy ended over six years ago: The ‘statue of limitations’ means banks don’t need to keep records that are over six years old. However, there is no official cut-off time so if you’ve still got the paperwork, while your chances of success are a little lower with older loans, many still do successfully reclaim.

 

Will they cancel my PPI if I reclaim it?

Yes, reclaiming almost certainly means your insurance will be cancelled. You are effectively saying it is not suitable for your needs. Only start the process if you definitely want your insurance to end.

 

I’ve forgotten who my loans / cards were with, how can I find out?

Check your credit report. It lists any debts that were alive within the last six years, even if they are now closed. You have the right to see your credit files, there may be a small fee payable but it is possible to do it for free. Companies such as Experian, Equifax or Callcredit can provide this information.

 

My bank says I didn’t have PPI. Is there another way to check?

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.

 

What name should I look for to spot PPI on the paperwork?

Look for any mention of an insurance fee or product that will cover your payments in you lost your job through accident, sickness or unemployment.
It may be called ‘payment cover’, ‘protection plan’, ‘ASU’, ‘loan protection’, ‘retail payment protection’, ‘loan care’ or similar. If unsure, ask the lender. If you find something on your paperwork you didn’t know about, investigate.

 

Will I have to close my account / lose my overdraft / be penalised if I reclaim?

No – this shouldn’t happen. The Ombudsman ruled against closing accounts during the bank charges campaign, so it’s no longer allowed. If you bank with the same provider and you want full protection, it may be worth opening an account with another provider before you start.

 

Will reclaiming PPI hit my credit rating?

No, it won’t hit your Credit Rating and won’t go on your credit file. 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.

 

Can I make more than one PPI complaint?

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.

 

Can I reclaim if I’m still paying off the loan?

Yes – though be aware any refunds may come off your balance (but it means you’ll owe less if that happens).

 

Can I reclaim if the loan or credit card’s repaid and I’m no longer a customer?

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.

 

I’ve had a debt management plan / IVA / been bankrupt, can I reclaim?

Yes, your finances now are not relevant to whether you were mis-sold or not.
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 but if it leaves you in financial hardship, tell the bank and it may change its offer.

This also applies to any policies purchased before a bankruptcy or insolvency order were made. Whether you’ve been discharged or not these ‘assets’ remain part of your estate so you are unlikely to get a refund.

An extra word of warning: if you’ve 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 claim yourself using this guide to help then use the money to pay your lender what you owe it.

 

I made a redundancy claim but found my PPI won’t cover it, was I mis-sold?

If you were led to believe you had redundancy cover when this wasn’t the case, you were mis-sold.

 

Will I need to pay tax on my refund?

Not on the refund, but you do need to pay income tax on the interest you receive as compensation. In brief, a payout’s usually made up of three elements:

  1. A refund of what you paid
  2. A refund of the interest you paid on the premium
  3. Statutory (8%) interest based on the total amount you were owed

You only need to pay tax on this last element. Let’s say your payout, including any interest you paid, was £1,000 and you’d been owed this for three years. The 8% interest means you’d get £240 on top – so the total becomes £1,240. You’d pay tax on the £240 at 20% (basic taxpayer rate), so that’s about £50. At the higher rate of 40% it’d be about £100.
The reason for this is it’s assumed if you hadn’t paid for PPI, you’d have kept the cash in the bank earning interest, which would be taxed.
Of the major banks, only RBS and NatWest automatically deduct tax for their current customers. Barclays (including Barclaycard), Halifax, HSBC, Lloyds TSB and Santander don’t, so organise a payment by contacting your tax office, or call the income tax helpline on 0845 300 0627.

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