How to reclaim mis-sold PPI for free

Reclaiming mis-sold PPI can be a quick and easy process. Use our straightforward PPI tool or template letter to start your claim before the August 2019 deadline.

1 Can I claim mis-sold PPI compensation?

If you took out any kind of consumer loan, store card, credit card or mortgage in the 1990s or 2000s, you may have been mis-sold PPI.

But there’s no need to hand over 30% of your compensation to a no-win no-fee claims-management company, use our free tool and template letter to start your own claim and keep 100% of the money you’re owed.

There’s also an important update for anyone who’s made a PPI claim before and it’s been rejected.

2 Use our free PPI claim tool

If your provider isn’t listed below, or if you would prefer to tailor a letter yourself, you can use our PPI template letter

If you can’t remember who your lender was, check your credit file, which you can do free of charge.

3 PPI mis-selling checklist

If your answer is ‘no’ to one or more of the following questions, then you may have been mis-sold PPI.

  • If the insurance was optional, was that made clear to you?
  • Did the adviser tell you about any significant exclusions under the policy – for example, the exclusion that says you won’t be covered for any pre-existing medical condition?
  • If you took out a loan or finance agreement, did the adviser make it clear that you would have to pay for the insurance upfront in one single payment?
  • If you had to pay for the PPI as a single payment, did the adviser make it clear that the insurance cost would be added to the loan and that you would be paying interest on it?
  • Single premium PPI insurance normally only lasts for five years. If your loan or finance agreement was for longer than this, did the adviser make it clear that the insurance would run out before you had finished paying for your loan or finance agreement? The adviser should also have told you that you would continue to pay interest on the insurance premium, even after the insurance expired.
  • If you bought PPI after 14 January 2005, did the adviser try to persuade you to take it out by saying something like: ‘We strongly recommend that you consider taking out PPI?’ If so, the sale counts as an ‘advised’ sale and they should have issued a ‘demands and needs statement’ to show why a particular policy has been recommended, and why it’s suitable for you. If they didn’t, this is grounds for complaint.
  • You can complain if you think your provider earned a high level of commission from your PPI and this was not made clear to you when you bought it.

4 Your PPI refund explained

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 would have been in if you had never taken PPI out in the first place.

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.

PPI compensation: jargon buster

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.

5 What do I do if my PPI compensation is unfair or rejected?

If your claim is rejected, or if you’re not sure whether the amount you have been compensated is correct, all is not lost.

First, 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, it will have been explained in your letter.

If you think anything is incorrect or that you have been unfairly treated, your first port of call should be your bank.

If you still don’t think the amount in the bank’s final offer is fair, you have the right to contact the free Financial Ombudsman Service to ask a question or challenge your bank’s decision.

There is no cost involved, but it’s 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.

If your claim was rejected before late 2015, you might be able to resubmit your claim - check the information below.

See our guide on taking a complaint to the financial ombudsman.

6 My last PPI claim was rejected

The Financial Conduct Authority (FCA) has put rules in place for how firms should handle claims in the wake of the Supreme Court ‘Plevin’ ruling, which looked at cases where providers earned a high level of commission from PPI and customers weren’t told about it.

The FCA now says that if the cost of your PPI was made up of more than 50% commission and you weren’t told this, you should get the difference back plus interest.

As bank loans with PPI typically had 67% commission and banks almost never mentioned it, a lot of people are likely to be owed compensation.

If you’ve had a PPI claim rejected in the past, you should resubmit it to your PPI provider and ask them to check for undisclosed high commission, as realistically there’s little to no way you could have possibly known about the amount of commission on the product you were sold.

It’s important to remember that you’ll only be compensated the percentage difference over 50%, so if your product was 67% commission, you’ll only get the 17% back.

These rules only officially come into effect on 29 August 2017, but there’s nothing to stop you resubmitting your claim ahead of this date and asking your PPI provider to check for undisclosed high commission. You can do this using our free PPI tool.

'We deserve better banks'
0

Join our campaign
& help us reach 100,000 signatures

Banks could do so much more to help you get the most out of your money. The big players in the market need to up their game, and the competition inquiry must ensure banks are held to account for how they treat their customers.

Find out more about Better banks on Which? Campaigns

Thank you for signing our campaign

Help us spread the word by sharing our campaign

#BetterBanks

Please tell us what you think of the Which? Consumer Rights website.

Your feedback is vital in helping us improve this site. All data will be treated confidentially. This survey will take approximately 5 minutes to complete.

Please take our survey so we can improve our website for you and others like you.