Who can reclaim mis-sold Payment Protection Insurance?
First of all, you need to establish if you have PPI. It might seem silly but you may well have the insurance without knowing.
When attached to a credit card you should be able to see any payments taken for PPI in your statements, but if you have a personal loan it might not be so obvious. Best to contact your lender to find out if you have it.
The clearest cases of mis-selling are those where customers were sold the insurance when they had no chance of claiming on it.
• If you were not employed at the time you took the insurance – whether you were unemployed, self-employed or retired – it will be impossible for you to make a valid insurance claim. You should not have been sold the insurance and you can claim money back.
• If, when you took the insurance, you had a medical problem that could have kept you from working, you should have been warned that the insurance was unlikely to be suitable for you. If it wasn't explained, and you took PPI, you can claim.
• If you were sold a 'single premium' policy – where the whole cost of the loan is paid for up front with money that is also borrowed at the same interest rate as the loan – you should at least be able to get a refund by cancelling the PPI. If you cancelled or repaid the loan early, but were unable to cancel the PPI, then you can claim for a refund.
If the refund you were offered when you cancelled the PPI was only a fraction of the cost you paid, you can claim to get a fair refund. If you were able to cancel the insurance, but the loan was redrawn at less favourable rates, you can also claim money back.
• If the entire cost of the PPI was not explained to you, or if the company only quoted the cost of the loan with the PPI attached, then you can claim.
• If you were told the insurance was compulsory it is likely you can claim. Lenders can insist that a borrower has PPI, but any company that signs up to the banking code must not insist you take out the insurance with them. It is far cheaper to buy it separately from an independent provider.
• If other important features of the loan were not explained – for example, the terms for cancelling the cover or significant exclusions such as stress and back problems – then you can claim.
• Most policies have an upper age limit – usually 65 or 70. If you were older than the age limit for your policy when you took the insurance, you can claim.
• If you were sold your PPI by one of the firms that has already had FSA action taken against it, there is a good chance you can claim.
• If you already had alternative cover that could insure your repayments – such as income protection or an employer illness or redundancy package – but were not asked about this, you could claim.
• If you bought PPI to cover a long term loan there is a chance that the insurance will run out before the loan is repaid. Most PPI policies will only run for five years, so if your loan term is longer than this the seller should have explained this limitation. If they didn't, you can claim.
• If you have noticed you are paying for PPI that you didn't know you had there is a chance that it was added without your knowledge, or through an 'opt out' box that you missed. It will be up to the seller to prove you agreed to the insurance, so if you can't remember being asked, you can claim.
