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You can make PPI claims for free, says Which?

Consumers don't need to make legal claim

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Cash for free? 36% say its important

You don’t need to take legal action to claim back mis-sold payment protection insurance (PPI), Which? warns today.

City law firm Clyde & Co plans to launch a lawsuit against HFC Bank to claim compensation for people mis-sold loan cover.

The firm is looking for around 500 people to start an action, and is planning an advertising campaign to recruit people who may have been mis-sold PPI.

Class action

But Which? personal finance campaigner Doug Taylor said: ‘While we want to see more people make claims, it’s hard to see the benefit of a class action as consumers can easily get the money back themselves.’

PPI is sold by many banks and credit card companies when you take out a new loan or card. It’s designed to cover your repayments if you become unable to work due to certain illnesses or injuries, or if you lose your job.

HFC Bank was fined £1.1m by the Financial Services Authority in January for failings over the way it sold the cover.


Mr Taylor said:‘Processing your own claim is simple. If you think you’ve been mis-sold PPI, you should write to your lender to claim the money back.

‘If you don’t get a satisfactory response, then you should take the matter to the Financial Ombudsman Service, which is free.’

It’s reported that the class action would either be on a ‘no win no fee’ basis, or would be underwritten by a third party, which could then take 20% to £30% of any payout awarded.

Which? guide

If you think you have been mis-sold PPI you can use a step-by-step guide on the Which? website.

A total of 163,000 people were sold PPI by HFC Bank group, which is part of banking giant HSBC, and paid up to £10,000 in premiums.

The £5bn PPI market has been criticised in recent years over claims that the insurance is overpriced, and is often mis-sold to people who would never be able to claim on it because of exclusions.

The cover isn’t a good deal, as mortgage and credit card PPI pays out only for a limited time, usually a year, although some policies offer a two-year payout period.

Credit and store card PPI often covers only the minimum amount that must be paid each month.

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