What is mis-sold PPI?
Payment Protection Insurance (PPI) is a form of insurance sometimes called Accident Sickness and Unemployment (ASU) cover. It protects the repayment of a debt in the case of a borrower being unable to make payments for reasons out of their control. It was mis-sold by many loan companies and high street banks for a decade, with products such as mortgages, loans, credit cards and overdrafts being covered with unethical, and now illegal, PPI policies.
Millions of people across the UK were mis-sold PPI and are entitled to make a claim. PPI is classed as mis-sold if: it was added to a loan product without the policyholder’s knowledge; the policyholder was misled into believing that PPI was not optional; the policyholder was told that a loan or credit card was ‘protected’ without the full conditions or cost of the PPI being explained; or if the policyholder was led to believe that PPI would help with the approval of a loan. Online loans may have mis-sold PPI by the use of pre-ticked boxes, meaning you had to opt-out of PPI instead of opting in.
The mis-selling of PPI happened on a huge scale, with around a quarter of all PPI policies estimated as being mis-sold. This went on for a decade until April 2011. The courts then ruled in favour of the consumer, and banks and other loan companies were told they must return around Â£4bn to 2.5 million people. This money is only going to be returned to consumers who make a valid PPI refund claim.
Finding out if you have been Mis-sold PPI
Maybe you believe that you have been mis-sold PPI. Look through your loan agreement and find out if you have been paying money for ‘payment cover’, ‘ASU’, ‘payment protection’, ‘loan protection’ or a similar term. If you feel that these policies were sold to you under the false pretences mentioned above you are due a refund, even if the loan which your PPI was covering has been paid back.
You may find that your PPI was paid as an additional charge with each loan repayment, or as a one-off payment at the start of your contract.
A credit report will list all of your financial products for the last six years, so this might be useful if you do not remember who your lender was. It doesn’t matter if you don’t have a copy of your paperwork for your loan either; once you know who your lender is, you have a legal right to obtain a copy of your original agreement from them for Â£1. If your account is closed they are not obliged to provide this paperwork, but buying a full breakdown of your account will show you whether you were sold PPI.
Mis-sold PPI can be only claimed if the payments were active within the last six years. So as long as you were still paying back a loan and its Mis-sold PPI six years ago, even if the loan was taken out ten years ago, you are due a claim.
How much can I claim?
A mis-sold PPI claims company will calculate this for you, as well as telling you if you have a case and guiding you to a successful claim. You will not be able to reclaim your full loan, but the mis-sold PPI on that loan will likely still be a sizeable sum which you can reclaim.
The figure which you are entitled to claim depends on the size of the loan, the cost of repayments and other factors. Someone who took out a loan of Â£3,600 for three years could be entitled to over Â£500. For bigger loans and mortgages this sum could be in the thousands.