You can reclaim £1,000s on PPI yourself, easily, for free. Don't hand 30% to a no-win no fee claims handler. Everyone who's got or had a loan, credit or store card, catalogue or car finance should check now if they were flogged these policies.
The banks lost in court after years of systemically mis-selling PPI. Now they've put up to £9 billion aside to pay out. This is a step-by-step DIY guide including a full FAQ and free template letters on how to join the millions who've complained and been paid back money wrongly taken from them.
STEP 1. CHECK YOUR POLICY
Not got your paperwork?
While it isn't always necessary, as you can start a reclaim without it, if you don't have a copy of your agreement or T&Cs you can contact your lender to ask for a copy (make sure T&Cs date back to the time of your agreement as terms will change over time).
Lenders can ask for £1 to provide this but not all do so you could include a £1 cheque (don't send cash, though) to speed it up a little. It may not provide the agreement if your account is closed but you can then ask for a full breakdown of your whole account (this can cost £10).
STEP 2. THE PPI MIS-SELLING CHECKLIST
Now it's time to go through the checklist below. Sellers of PPI have a responsibility to ensure you understand the nature of the product, and that it's appropriate for you. All policies will have exclusions, and you should have been told about them. As most policies are bought alongside a financial product rather than on their own, the key issue is:
... what was said at the point you were sold the product.
Here are the key mis-selling categories. If you fit one or more of these you probably have a case:
Were you told it was compulsory?
It's a common complaint that consumers are told they must buy a policy from the same provider as the loan in order to be accepted for the product. This is mis-selling.
Any company that subscribes to the Lending Code (see list) agrees it won't insist you buy an insurance product from it. Therefore if the salesperson:
- Didn't make it clear the policy was optional or tell you about any cooling off period
- Implied or stated it would be more expensive if you didn't take the insurance
- Implied or insisted you take out their policy to qualify for the product or help with your application
- Was very pushy when selling the product, so that you felt you could not say no
- Would not let you continue with the application if you did not sign the insurance agreement as well
Didn't realise you had cover?
Have you just checked your loan agreement to find that you've been paying for insurance, but didn't realise until now that you had it, or what it's for?
Some old agreements (pre-July 2007) may have used pre-ticked boxes so you had to opt out of the insurance rather than opt in, which is unfair. Always check this, and if you're paying for insurance you didn't know you had
Were you told or sold the wrong thing?
This covers anything from the fact you were already covered through work or your partner, the policy not being what you agreed to, the insurance term is shorter than your loan and you didn't realise, or if you thought it was a joint policy but in fact it was only in one person's name.
Self-employed, unemployed or retired?
If you were unemployed or retired, check if the policy included unemployment cover. If it did, the unemployment cover's worthless – this should've been pointed out.
If you were self-employed, check whether you were eligible for a payout if your business went bust (usually not) – if not, and it wasn't pointed out, you may have a case.
Had any medical problems in the past?
Most policies exclude existing medical conditions, meaning you're unlikely to be covered for any medical problems you've had in the past. You should've been asked about this, and informed the policy could be affected.
Has your provider already been fined?
The regulator, the FSA, has said it wants to see better practice. Many major providers, including Alliance and Leicester, Liverpool Victoria and Capital One have been fined for "not treating customers fairly". If yours has, it's very likely you've a case.
Write the company that sold the policy and ask for a refund. In the old days this often meant following a dance - thankfully it's much easier now. (You can easily find guides online)
The most important thing to understand is: don't be put off if you're rejected. You may also need to go to the Ombudsman later, but you need to have written to the lender first.
STEP 4. WRITE TO THE OMBUDSMAN
If you still haven't reached a satisfactory conclusion, it's time to make a formal complaint to the Financial Ombudsman Service.
This is the official independent service for settling disputes between financial companies and their customers. The Ombudsman is completely free to use, and will adjudicate on whether your complaint should be paid out.
It'll decide whether your policy was sold unfairly or unreasonably (see some examples). It can only do so once eight weeks have passed from the date of your first complaint letter (between June and Dec 2011 banks had 12 weeks to deal with complaints), unless your case was put on hold by the lender and it specifically suggests you go to the Ombudsman (although this should no longer be happening).
While the process of using the Ombudsman is simple, and the amount of money you could receive is massive, it's not usually quick. Your case may take over a year to be settled, so don't count on the cash now.
How to make a complaint
Just contact the Ombudsman and ask it to take on your case. You can either do this via the Financial Ombudsman Service website or by calling 0800 0234 567 (or 0300 123 9123 from a mobile). It will look at each case individually, so if yours is a matter of you saying one thing happened but the company disagrees, the Ombudsman will decide if it thinks the company acted fairly.
As the party with responsibility to provide full details of the insurance, the lender is expected to have more evidence on what happened to back up its case.
In the last six months, of the cases that needed to go as far as the Ombudsman, 88% were awarded in consumers' favour. And even if yours isn't, there is no penalty for losing - it just means you don't get the money back.
The Ombudsman will then send you a confirmation letter to say it'll look into your case and get back to you if it needs any more information.
Sometimes this will take a long time, usually around a year but may be even longer as the Ombudsman deals with huge numbers of complaints. But don't worry - you can leave the matter to the Ombudsman to resolve and it will contact you with any offers from your lender.
If you think the Ombudsman wrongly turned you down
The Ombudsman's decision is usually made by an assigned case worker, but if you disagree with the result you can ask for a formal decision to be made by one of the 41 actual Ombudsmen at the service. This usually takes several months as it involves a detailed investigation into your case, but don't be afraid to push your complaint further if you think the initial decision isn't right.
After that, while the finance company must accept the Ombudsman's decision, you still have the right to take the company to court. It's also worth noting that if you feel the Ombudsman hasn't handled your case correctly, eg, there have been unnecessary delays, you can refer it to the Ombudsman's Service Review Team.
If that doesn't resolve it you've a right to go to the Independent Assessor, though this is only about quality of service, not the actual decision made.
