If, like thousands of other people, you took out a loan, credit card or store card at the peak of payment protection insurance (PPI) mis-selling then you may be eligible to reclaim your premiums.
Our guide takes you through the steps of reclaiming.
There are two main reasons why you may be eligible to reclaim your PPI payments.
Am I eligible to reclaim?
If you were sold PPI without realising, or without being told it was optional, then you should look at claiming.
You may also have been sold PPI even though your circumstances at the time meant you would have had no chance of claiming on it if you needed to.
If any one of the following applies to you then there’s a good chance you’ll be entitled to reclaim your PPI payments:
If you were unemployed, self-employed or retired when you took out a PPI policy that included unemployment cover
If you already had a medical condition at the time of taking out the policy that could have prevented you from working at some point in the future
If you were older than the upper age limit for your policy
If the term of your PPI cover was shorter than the term of your loan and it wasn’t explained to you that you wouldn’t be protected towards the end of your loan term
If you weren’t told about the exclusions, or circumstances in which you couldn’t claim. For example many policies may not have paid out if you were off work with stress or back problems
If the total cost of adding PPI to the loan wasn’t clearly explained to you or if the quote you were given for the cost of the loan automatically had PPI added
If you were told PPI was compulsory
If you were told that you had to get your PPI cover from the same provider as the loan or credit card
If you felt that you were being pressured into taking the cover and unable to say no
If you weren’t told how to go about cancelling your policy
If you already had cover in place that could have protected your repayments but weren’t asked about this or were told that you needed separate cover
If you’ve checked and found that you are paying for PPI cover that you didn’t realise you had then it may be the case that it was added without your consent or that there was an opt-out box which wasn’t made obvious to you
Remember, it’s up to the PPI seller to prove that you had the insurance fully explained to you and that you agreed to pay it.
If they can’t do that then there’s a good chance your claim will be successful.
How can I find out if I have PPI?
If you have statements for your credit card or loan then check these for any additional payments for PPI.
If you don’t have any statements to refer to the simplest thing to do is contact the provider directly and ask them.
Your first point of contact should be the company who sold you the PPI.
The bad press that PPI mis-selling has received means that most providers are aware they need to uphold any valid claims.
Who do I contact about my claim?
This means that going directly to the provider could be the quickest and easiest route to reclaiming your money.
Quite often the provider will pay your claim without really challenging it.
If they disagree with your claim, and maintain that PPI was fairly sold to you, then you are entitled to go back to them and request that they prove that this is the case.
There’s a good chance that they’ll decide to back down at this point.
What if my PPI provider won't help?
If going direct doesn’t work then your next point of contact should be consumer complaints organisation the Financial Ombudsman Service (FOS).
It can step in and formally get involved if the provider hasn’t resolved your complaint within eight weeks, or if you're not happy with the company's response.
The service is completely free to use and will independently assess whether you were unfairly sold to.
Many people are tempted to go through a claims management company who will offer to reclaim the money on your behalf.
What they may not make clear is that if they are successful they will take a percentage of your refund, often as much as 30 per cent, which is a lot to pay for something you can do yourself!
What should I say in my complaint letter?
If you’re comfortable writing your own letter then remember to avoid being emotional or angry and instead focus on clearly listing the reasons why you believe you were mis-sold to.
Include copies of any relevant documents that support your claim in your letter.
Also, consider sending it by recorded delivery so that there’s a record of when it was received and when the eight week response period officially starts.
How much will I get?
If your claim is successful you should get back all the premiums you have paid, with interest added.
Once you’ve cancelled your mis-sold PPI and claimed back your payments it’s worth reviewing your situation once more.
If you still have a loan or credit card debt then you may need to protect your repayments in the event that you are made redundant or are off work long-term due to an accident or sickness.
You can compare income protection policies to make sure that this time round you get the right policy for you.