If you have a credit card or a loan that has been going on for the since 2007 or earlier, it is quite possible that you might be paying a certain portion of your repayment amount towards the payment protection insurance. Payment Protection Insurance or the PPI is an insurance tool that ensures that outstanding monthly dues for the particular loan or credit card is duly paid in times when the subject is not able to pay for it due to job loss, accident or a medical situation. Though the PPI is a useful insurance product, it was largely mis-sold due to mischievous marketing activities of the banks, agents and the company representatives responsible for selling the PPI. The companies made huge gains by selling PPI and the agents earned a lot in commissions by selling PPI to customers wrongfully, making the overall PPI scam run into billions of dollars. The companies lost the case against the government and the customers in the court of law and as per the new regulations, the banks and the lending companies are obliged to pay back the PPI amount to whoever proves to be eligible.
If you think that you have been mis-sold PPI as well, the first thing that you need to do is check your policy document and confirm that you have PPI attached to your loan or insurance. If yes, it is essential to ascertain if you have been mis-sold PPI or were you informed accurately about PPI before you signed on that dotted line. Answer questions like –
- Did you know you had PPI?
- Did agent tell you it is necessary to buy PPI?
- Were you told that buying PPI will increase the chance of loan sanction?
- Were you pushed too much or forced to buy PPI?
- Were you retired or self-employed at the time of being sold PPI?
- Were you above the age of 70 at the time of being sold PPI?
- Were you told that buying PPI will increase your credit score or ratings?
If your answer is yes to any of the above questions, then you have been mis-sold PPI and you have the right to reclaim the amount you have paid towards it. However, in most of the cases you can only claim if the policy was active or ended in the last six years or only till the three years when you came to know about the mis-sold PPI. It is not mandatory, but makes it easy to claim as per the new regulations. You can nowadays also check the amount you are eligible to reclaim by visiting .
Now, once you are confirmed you have been mis-sold PPI, contact the company in writing and ask for reimbursement. Most of the time, the companies reply within three to six weeks regarding their decision on your claim, and if your claim is valid, the company will repay the amount soon. However, if the company denies, take the rejection letter and other relevant documents and file for a PPI claim through the Financial Ombudsman Service. They would manage the entire procedure of providing you compensation from their side, but if the bank rejects it again or the dispute is not solved, an ombudsman is entitled in your case that decision is final and binding upon all. But, that is not the last resort as if the bank still rejects it, then you can hire a lawyer and pursue your case of claiming back the PPI amount, but it can be an expensive affair.
Author Bio – Jenna Mascarehnas is one of the most renowned finance bloggers and has written extensively on PPI and other insurance and finance products to help customers make an informed decision.