How To Claim PPI
A Look At The Two Options and Which Is Right For You
The mis-selling of PPI was carried out on an enormous scale. If you’re one of the people that has been affected, you’re probably wondering, How do I claim PPI? Well, there’s a bit more to it than simply collecting your luggage from a conveyor belt and this article will explain the process.
There are two options available to you for claiming back PPI, each with their own pros and cons. The following is a presentation of both options with points to consider before making your claim/s.
The Two Options to Claim PPI
- Do it yourself, or
- Use a PPI claims company to do it for you
Do even a small amount of research on the Internet and you’ll soon discover that there are those that say you should claim PPI by yourself while others suggest using a third party to claim for you.
Both options are valid. It ultimately comes down to your personal preference, which will be determined by several factors.
Probably the biggest factor that’s talked about on the Internet when discussing how to claim PPI is the cost of using a third party to do it for you. The advice usually goes something like ‘it’s easy to claim PPI and there’s no need to pay a middleman to do it for you’.
While that’s true to a point, it’s often not as black and white as that. Sure, in theory all you have to do is complete a form, sign it and send it off to your lender with a letter of complaint, and that’s it.
But as with all theories, it’s not always that simple in practice. While ‘completing a form’ sounds like a quick and painless process, that in itself can be where many people simply give up. One of the common reasons for giving up is due to not having the correct information to complete the PPI claim form with. More on that in a moment.
The Anatomy of a PPI Claim
While there are trends to the PPI claims process, each case ultimately is unique with its own process to follow. To give you an idea of what might happen, the following is a breakdown of an ‘average’ PPI claim.
1. Gather all your paperwork and find the loans, mortgages and credit agreements where you have PPI
2. Decide if you willingly and knowingly took the policy out or if you believe the PPI was mis-sold
3. Complete a claim form for every PPI policy where you wish to claim PPI
4. Send your PPI claim form and letter of complaint to the respective lender (you will need to do this for every claim you wish to make)
5. Write any interim letters or emails that are needed throughout the process, as well as make the necessary phone calls
6. Chase up your lender if and when needed
7. Receive a letter from your lender, which will either reject your claim or make you an offer
8a. If it’s a rejection letter, take your claim to the Financial Ombudsman Service (FOS) on appeal
8b. If it’s an offer letter, do the calculations to confirm that the offer is correct or whether your lender is trying to ‘short change’ you
9a. If your claim is to be appealed, send it off to the FOS with all the necessary details and covering letter
9b. If the offer is correct, accept it and await your PPI refund
9c. If you believe the offer to be incorrect, go back to your lender and challenge it
Looking Deeper Into The Process of Claiming PPI
The 4 main steps involved in claiming back PPI are as follows:
1. Gathering Your Paperwork and Credit History
For many people, the first part of the process is a significant stumbling block because the necessary paperwork has been thrown away or misplaced. And without the paperwork, it can be difficult to even start the process, never mind get any of the PPI refunds you might be due.
If you claim PPI by yourself, you’ll need to use a credit checking service to find out your entire loan and credit history if you’re not already 100% sure of it. We recommend Credit Expert, which is owned by Experian and is the service that most lenders use before giving you a loan or not.
If you do claim PPI yourself, you’ll have to work your way through all the results and check each loan or credit agreement to see if there is PPI attached. Remember to check for hidden PPI too as this is how it was often mis-sold: by adding it on without your knowledge or consent. Remember also that PPI can go by other names, so look out for that too.
If you use a good Claims Company (emphasis on ‘good’), they’ll go through your entire loan history for you and find all the policies where PPI is attached. That will include finding any hidden PPI and PPI that’s under a different name. This is part of the service and in and of itself can save you a considerable amount of time and stress.
2. Completing and Sending Your PPI Claim Forms
Once you have your loan and credit history laid out before you, you should have found all the policies that have PPI attached to them. Next you’ll need to decide if you believe the payment protection insurance was mis-sold or not. If you’re unsure, check to see all the ways that PPI was mis-sold.
Once you know each PPI policy you have and which you believe were mis-sold, you’ll then need to complete a PPI claim form. Remember, you’ll need to complete one claim form for each claim you wish to make, and then send it to the relevant lender.
3. Administering The PPI Claim Process
It really isn’t possible to tell you how much work will be involved with your claim because there as so many variables that play a part in it. Some PPI claims go quite smoothly, in that there aren’t too many letters or phone calls required to bring it to completion.
On the flip side are the claims that do require considerable administration. One example of such a claim is where your bank comes back saying that there’s no PPI on the loan when there clearly is. Another example might be that the broker who originally sold the policy is now being out of business. Yet a third example could be your bank saying you took the policy out willingly when you know you didn’t.
Trying to locate an out-of-business broker requires a very different approach than arguing that there is PPI on the policy and that it was mis-sold.
Bottom line: Some PPI claims involve a lot of work to get the refund payment and others require less so.
4a. Receiving a Rejection Letter From Your Bank
If your claim is rejected by your bank, you can either walk away and leave it there or you can take it to the Financial Ombudsman Service (FOS) and appeal.
The FOS is currently finding in favour of the claimant in about 70% of cases, so it really is worth taking it to them. Unfortunately, the majority of people claiming by themselves actually walk away if their bank rejects their claim, probably thinking that the bank is being truthful with them (even though they’re the very people that may have mis-sold them PPI in the first place).
FOS turnaround times are around 12 to 18 months, which may seem like such a long time that it’s not worth the effort. But if you’ve been without your money for several years already, a few more months isn’t much in the grand scheme of things.
4b. Receiving an offer letter form your bank
If your bank offers you a refund, it’s important that you check the figures carefully to make sure they’re not trying to short change you in anyway.
A couple of things to look out for are:
- That the offer is for your PPI premiums, plus the PPI interest, plus 8% compensation of that amount for every year you’ve had the policy. Sometimes banks will try and get away with only refunding the premiums or something similar. If PPI was mis-sold, then is was mis-sold; there’s no middle ground so be sure to get back everything you are owed.
- That the offer is for the correct account. It’s been known for banks to offer a payout on a different account than the one that was being claimed for, because it would be a cheaper payout for them. Make sure your offer is in respect of the account that you are claiming on.
Conclusion: What’s The Best Way For You To Claim PPI?
The best way for you to claim PPI is largely dependent on you:
- Do you know all of your financial history?
- How busy are you on a day to day basis?
- How organised are you generally?
- How much time do you have available to handle your claims (keeping in mind that each claim will require its own amount of work)?
- Are you confident that you know what your refund amount you should be (so you know if your offer is accurate or not)?
- Do you often put things off because it seems like ‘there’s never enough time’?
It’s true that you can claim PPI by yourself and it’s also true that by doing so, you will save yourself the fee of paying a claims company.
On the other side of that coin is the amount of time and stress you may be saving yourself by handing your claims over, not to mention enjoying peace of mind.
PPI claims are somewhat similar to buying or selling a house in that you don’t have to use a solicitor to handle the process for you, but sometimes it pays to, er, pay someone else to do the work for you!
How Much Are You Owed?
When you claim PPI, it’s a good idea to go into the process with a good idea of how much you are owed. That way, you’ll know how accurate your bank’s refund offer is.
If you don’t know what your PPI refund amount should be, this PPI refund calculator guide will walk you through the process of getting that figure.
Image Credit: Ahmad Hashim