PPI claims

Millions of people affected by PPI mis-selling could now be entitled to compensation.

The rules around how lenders can sell PPI have changed - it can no longer be sold at the time you take out a credit card, loan or finance package (such as those you sign up for is you buy new electrical goods or furniture). In the past however, that was commonly the time PPI would be pushed.

How do I know if I can claim for a mis-sold PPI?

The reason why there has been such an issue with this insurance product is that there are lots of exclusions which often weren't explained. As a result many people paid for a policy they wouldn't be eligible to make a claim on. Even now, you may not be aware of whether or not you'd in fact be eligible to make a claim on your PPI policy.

It's important to check the terms and conditions, but common exclusions include those who aren't in work. Therefore if you were unemployed, a student, house wife/house husband or carer when you took the policy out, it won't cover you. Also, PPI doesn't cover the self-employed.

Questions to ask

  • Did the salesperson not make it clear that the policy was optional or inform you about the cooling off period?
  • Did the salesperson imply or state that your credit agreement would be more expensive without insurance?
  • Did the salesperson imply or insist that you take out the policy as it would help your application?
  • Was the salesperson very pushy? so much so that you couldn't say no!
  • Some pre-2007 agreements had pre-ticked boxes for PPI that you had to opt out of!
  • 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 you would be paying interest on it?
  • If you already had cover, whether through work or another policy then you may not have required a new PPI policy.
  • Did the policy not cover you for what you had agreed?
  • Was the insurance term shorter than the loan agreement?
  • Were you told your policy was a joint policy when in fact it was a single policy

What do I do next?

Write to the bank or lender and explain to why you think you were mis-sold PPI. They should then get back to you to let you know whether you have a viable claim or not.

If you haven't heard back from them after eight weeks, or you think the bank or lender has made the wrong decision, then it may be time to take your case to the independent Financial Ombudsman Service, which has welcomed the new ruling.

You can visit the Financial Ombudsman Service website, or you can contact the service on 08000 234567.

The above is provided as information only. Iva.co.uk does not provide debt advice. You must always seek professional advice before taking any action to resolve your debts.