How to reclaim mis-sold PPI for free

Make a free, quick and easy PPI claim before the August 2019 deadline - and keep all of your compensation.

1 Can I claim mis-sold PPI compensation?

If you had any kind of  credit product, such as a consumer loan, store card, credit card or mortgage up until 2006, when the regulator began imposing fines for PPI mis-selling, you may have been mis-sold PPI.

Some mis-selling may even have taken place after this date. Which? can help you make your own PPI claim for free, and if you're successful you'll keep all of the money you’re owed.

2 Make your free PPI claim 

There's no need to hand over a huge chunk of your compensation. A lot of companies promise to make a PPI claim on your behalf in exchange for a large percentage of your compensation.

3 PPI mis-selling checklist

If you're still unsure whether you want to make a PPI claim you can check the mis-selling checklist below. 

But many people took out the product so long ago it’s difficult to remember exactly what happened, and in that case you shouldn’t be afraid to put in a claim.

If your answer is ‘no’ to one or more of the following questions, it's likely you were 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, and as many as two in five PPI claims referred to the FOS are successful. But, 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 Plevin ruling

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.

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