Payment Protection Insurance (PPI) is supposed to cover your debt repayments if you can’t work, but many policies have been mis-sold.
If you’ve ever taken out a loan, mortgage, credit card or store card, or bought something on credit, then there’s a chance you took out a PPI policy at the same time.
If you believe you have been mis-sold, use our tool below to reclaim your money.
Reclaim mis-sold PPI
Reclaiming mis-sold PPI can be a quick and easy process. Just follow these four simple steps to help you use our dedicated PPI tool:
- Check your eligibility against our PPI checklist
- Select the company who sold PPI to you. If your provider isn’t listed in the drop-down menu, simply choose ‘other’ from the list and you’ll be prompted to fill in details on the following page
- Fill in your contact details
- Answer some questions about how you were mis-sold. These are mostly 'yes' or 'no' answers so it won’t take long.
Once you've done all this, a complaint letter will be generated which will either be emailed to your provider or sent to you to send in the post, depending on the provider.
If you'd prefer to tailor a letter yourself, you can use our template letter.
Your PPI refund
If your complaint is upheld, then the company that sold you the policy should do its best to put you back in the position you’d have been in if you'd never taken out PPI in the first place.
Regular premium policy
If you have a regular premium policy, such as those attached to mortgages and credit cards, then you should receive a refund of any PPI premiums paid by you and, if applicable, a refund of any additional interest charged to you because of the PPI.
Single premium policy
If you have a single premium policy, such as those often attached to personal loans or finance agreements, then the compensation you receive will depend on whether your loan is still in force or not.
Loan still in force Your lender should calculate what your loan repayments would have been had PPI not been added to the loan, and how much should have been repaid so far. Any overpayments you have made will therefore be applied to your outstanding loan, reducing the amount of capital you owe.
Loan no longer in force You should still receive any PPI payments you made, plus the difference between the redemption figure you paid and what it would have been had you never taken out the PPI policy.
Mis-sold PPI statutory compensation
You may also be entitled to statutory compensation, which is usually set at an interest rate of 8% of the money refunded.
This is to make up for the fact that you haven't been able to use the money during the time you held the PPI – after all, you might have saved or spent it elsewhere.
I'm not sure my PPI compensation offer is fair
If you're not sure whether the amount you have been compensated is correct, all is not lost.
Firstly, you should check the factors that can affect the amount you get. For example, did you make a claim on the policy or do you owe the bank money?
You should also check the assumptions the bank has made. If your bank needed to make any assumptions to calculate your offer, they will have been explained in your letter.
If you think anything is incorrect or you have been unfairly treated, your first port of call should be your bank. Read our leaflet on how to check your PPI offer.
If you still don't think the amount in the bank's final offer is fair, you've got the right to contact the free Financial Ombudsman Service to ask a question or challenge a decision from your bank.
There is no cost in doing this but it is worth noting that due to the volume of PPI complaints, this process can take a while - in some cases, it may take over a year to decide.
See our guide on taking a complaint to the financial ombudsman.