How to reclaim mis-sold PPI for free

Payment Protection Insurance (PPI) is supposed to cover your debt repayments if you can’t work, but many policies were mis-sold alongside legitimate financial products.

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PPI claims deadline

Mis-sold payment protection insurance (PPI) compensation claims must be made by June 2019 under proposals announced by the Financial Conduct Authority. In some cases, you may have less time than this. Read more about this below. 

Reclaim mis-sold PPI

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 were mis-sold a PPI policy at the same time.

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, you can use our template letter.
  • Fill in your contact details
  • Choose the relevant statements which best summarise how you were mis-sold PPI.

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.

1 Use our free PPI tool

Important information - please read

You will need to include the following information in your letter:

Important and helpful:

You may not even remember if you had PPI. You can still make a claim if you believe you were mis-sold, regardless of whether you have the following information or not.

But, providing as much information as you can up front will help speed up your claim as it will be less likely that the bank will need to contact you to discuss your claim.

  • Your date of birth
  • When you believe you were mis-sold the PPI policy
  • Your PPI policy number
  • The type of product you had - mortgage/loan/credit card/store card/finance agreement

Information that will help and speed up your claim:

To avoid delays you should include why you think you were mis-sold PPI. If you don’t include it your PPI provider will probably need to contact you to discuss your claim. With included examples of what constitutes mis-selling below.

Examples of what constitutes mis-selling:

  • You weren’t told the insurance was optional
  • You were led to believe your application would be rejected if you didn’t take PPI
  • The policy wasn’t adequately explained to you
  • You had a medical condition that would have excluded you from coverage
  • The insurance wasn’t suitable for you as you weren’t in indefinite full-time employment
  • You were over the maximum age of coverage in the policy
  • You had other plans in place to repay your borrowing if you became unemployed

If you have or had an individual voluntary arrangement (IVA) in place you should also let your PPI provider know as this will help speed up your claim.

2 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.

3 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.

4 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

PPI timebar

The banks sent letters to 5.5m people, informing them that they might have cause to complain about being mis-sold. These letters stipulate a time limit of 3 years from receiving them to make a complaint about mis-selling. After this 3 year period, these customers lose their right to complain about mis-selling. 

3 million of these letters were sent in 2013, meaning those who received a letter then only have until the end of this year (2016) at the latest to make a complaint. 

Note that only a third of people who have been written to have submitted a complaint - although the uphold rate on those who have complained is 97%. So don't hesitate if you've been affected.


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