How to tell if you’ve been mis-sold PPIRules of selling

FSA’s rules advise how firms and advisers should sell PPI

Since January 2005, the sale of payment protection insurance (PPI) policies has been regulated by the Financial Services Authority (FSA).

The FSA’s rules are very clear about what firms and advisers selling PPI should do at the time the insurance is sold to you.

Information you should have been given

If some or all of this information was not made clear to you either before or at the time you agreed to take out the insurance, then you have grounds to complain.

• If PPI was optional on the product you bought, this must have been made clear.
• The adviser should have made you aware of any significant policy exclusions and checked whether any of these exclusions applied to you.
• The adviser should have made it clear how much the policy would cost and whether the PPI would be paid for by a single up front premium, or by regular premiums.
• If it was a single premium policy, then the adviser should have made it clear that the cost of the insurance would be added to the loan or finance agreement, and that you would pay interest on the insurance premium.
• If the insurance expired before your loan or finance agreement, the adviser should have made it clear that this was the case and (in the case of single premium policies) that you would continue to pay interest on the insurance premium after the insurance had expired.

Pressure sales

If an adviser tried to persuade you to take out PPI by saying something like ‘we strongly recommend that you consider taking out PPI’, the sale has moved from a ‘non-advised’ to an ‘advised’ sale.

If this happened to you and you did not receive a demands and needs statement (see below), then you have grounds for complaint.

There are certain additional requirements on firms and advisers that carry out ‘advised’ sales.

With an advised sale the adviser must assess whether you need PPI, considering your circumstances and any existing insurance you might have. The adviser must also assess whether the policy, including its costs, is right for you.

Meeting your needs

If the policy does not meet all your needs, perhaps because of one of the exclusions, the adviser must clearly tell you which of your needs the policy will not meet and must take this into account when considering whether to recommend the policy to you.

For advised sales

With advised sales, the adviser must issue a demands and needs statement to show why a particular policy has been recommended and why it is suitable for you.

Firms or advisers giving advised sales must keep records showing that a suitable recommendation was made, and recording any demands and needs that might not have been met.

Don't give in

The company may try to wriggle out of upholding your complaint by saying that all this information was provided to you in writing after the sale. If it does do this, then don't be put off – if they broke the rules, they broke the rules – which means you can complain.

The rules are very clear that you must be given a certain amount of information at the time you are buying the insurance so you can make an informed decision about whether the insurance is right for you or not.

If you weren't told about things like cost and policy exclusions until after you had bought the insurance then you couldn't take these things into account when make your decision.

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