PPI – one year to go, and you can DIY
Yes, it’s associated with unwarranted and annoying phone calls and a never-ending stream of adverts on TV and radio – but potentially millions of people are entitled to PPI refunds and still haven’t claimed.
The deadline to start a claim is 29 August 2019 (though this may be pushed back, more on that below), so with potentially only a year to go, take the time to understand what you need to do if you’re eligible for a refund.
What is PPI?
Payment protection insurance was widely sold as an add-on to mortgages, credit cards, loans, store cards and other financial products. It was designed to cover you in case of an accident, illness or unemployment which would see you struggle with repayments, and took the form of an extra monthly premium.
Already prone to refund claims because people were wrongly informed it was compulsory or they were misinformed or sold the wrong policy, a 2014 Supreme Court ruling – now known simply as Plevin after the defendant, Susan Plevin – opening the floodgates for PPI claims against institutions that had sold the policies.
The ruling adjudged that the excessively high hidden commissions commonly earned by PPI sellers was unfair. The Financial Conduct Authority (FCA) set up a redress scheme in response, covering millions of policies.
By this summer, Lloyds, Barclays and RBS alone had already allocated more than £32bn to cover the cost of mis-selling claims.
Am I eligible for a refund?
Over 64m PPI policies were estimated to have been sold, around 45m of them by banks. It’s thought that only a minority of people have so far claimed.
In general, if you were ever sold PPI then you’re likely eligible to claim a refund. FCA guidance states:
You may be eligible to get back some money if your PPI policy covered repayments on a credit agreement – like a credit card, loan or mortgage – and you:
- took it out before 6 April 2007, but it was still open on or after 6 April 2008 (even if you had stopped using it)
- took it out on or after 6 April 2007 (whether or not it was still open on or after 6 April 2008)
Making a claim: DIY or use a company?
You’ve done well if you’ve somehow avoided calls and texts about PPI refunds. Since claims began, an entire industry has sprung up to handle claims on behalf of people.
These claims handling companies will do everything for you after you provide a little information – but they’ll also charge commission of up to 20% on any refund you receive. PPI claims range from hundreds of pounds to tens of thousands of pounds, so that’s a lot of money to save in commission if you DIY.
Fortunately, it’s a straightforward process to claim yourself, meaning you’ll pocket all of the refund with a little effort and pretty much the same information that you’ll be providing to a claims company anyway. So unless you’re certain it won’t get done unless you engage a company to do it, claiming yourself is usually a better way to go.
How to claim
If you have the paperwork relating to your old loans or products, it’s easy to determine if you took out PPI. Go back through your statements and check for mentions of insurance payments to cover you for unemployment, illness or accidents – typically, those will be terms such as ‘payment cover’ or ‘protection plan’.
If you no longer have the paperwork, then contact the lender for details of your agreement and conditions. Thanks to GDPR, you should be provided with this information for free if your account with them is still open (it can be harder to obtain if it closed more than six years ago, after which time banks don’t legally have to retain your details according to the statute of limitations).
Either way, you should contact your loan or card provider to find out – it could be well worth your time!
Once you have your details handy, the simplest way to claim is to go to resolver.co.uk, a great website with a completely free template system to file your claim. Your provider will be contacted and everything is handled within the Resolver system.
And because PPI claims are now so common, you shouldn’t expect long delays. You could have a nice lump sum coming your way in a matter of weeks!