Reclaiming

If you had a credit product such as a loan, credit card or catalogue account, you may have been compelled to buy PPI which you did not need or could not have used. In some cases you may also be able to claim some charges and payments for other insurance products such as those to cover mortgages.
Although there are still lots of claims management companies out there that will charge you a fee for the privilege of handling the reclaims for you, you can do the whole thing yourself without having to pay any fees.

Defaulted accounts

  • If the account is still with the original lender, any redress will be offset from the outstanding amount.
  • If the account has been assigned in absolute (sold) to a debt purchaser, the redress may be paid directly to you, but this would depend on whether there are any buyback clauses between the lender and the debt purchaser.
A PPI reclaim could be construed as “acknowledgment of the debt” for the purposes of limitation. See statute barred.

The process

1

Did you have PPI?

spreadsheetsYour first step should be to find out whether you had PPI or any other type of insurance and how much you paid for it. Depending on the credit product, insurance can be applied in various ways.

  • With loans, you may have to check the actual loan agreement to see if it was added to the total amount you were paying every month as your statements probably wouldn’t show it. Many loans had a single premium policy.
  • With revolving credit facilities such as storecards, credit cards and catalogue accounts, the insurance is proportional to the outstanding balance and is charged every month, so it would appear on your statements as an additional charge.
  • Mortgage lenders offer insisted in sickness and/or unemployment insurance being taken out. Unlike the PPI applied to other credit products mentioned above, mortgage PPI wouldn’t have been added to your mortgage and you would have been making monthly payments into your policy, totally separate from your mortgage account.
  • Bank accounts with credit facilities such as the so-called flexiloans may also have had insurance applied to them. Some banks even sold overdraft PPI, this is different and separate from the usual overdraft charges.

How to obtain information

There are two ways to obtain account information, you may need to use either or both.

SAR
CCA request
Closed accounts Yes No
Live accounts Yes Yes
Defaulted accounts Yes Yes
Account type Any Regulated by the CCA
Documents Statements and historical data Copy of your credit agreement
Relevant legislation Data Protection Act Consumer Credit Act
Fee £10.00 £1.00
Time for compliance Up to 40 days 14 working days
Info and template letters SAR CCA request
2

Was it mis-sold?

Not all insurance was mis-sold, you need to go back to the time you opened the account and look out for any indication of mis-selling such as the following:

sales

  • You were told the insurance was compulsory or that you wouldn’t be approved unless you took it.
  • They said you would pay a higher rate of interest if you didn’t take out the insurance.
  • They were pushy and you felt obliged to take out the insurance.
  • You were not aware that you had insurance because the box was pre-ticked or someone else ticked it.
  • You already had equivalent cover, for example through your employer or your partner.
  • You were not employed at the time (i.e. self-employed, unemployed, freelancer, home maker, student, etc.) and the policy provided unemployment cover, which very likely wouldn’t have paid out. They should have asked you about your employment status and explained what the policy did and didn’t cover.
  • They told you that the policy would cover you despite being a contractor, self-employed, etc. and it would have paid out/didn’t pay out.
  • You were over retirement age. Most policies have an upper age limit of around 65.
  • You were under the age limit but your payments didn’t stop when you reached the age limit.
  • You had a pre-existing medical condition, the policy included sickness cover and the person who sold you the policy didn’t ask about your health or explain about any exclusions.
  • You were not informed about certain medical conditions that are commonly excluded.
  • In the case of fixed term loans, where the insurance didn’t cover the full term of the loan.
  • The loan was joint but the insurance only covered one borrower.
  • You were not allowed to cancel your policy.
  • The costs of the insurance were not explained to you, or you were not told that you would be paying interest on the insurance.
  • You had a single premium policy that cost more than it would have paid out.
3

Contact your lender

Over the past few years, many companies have made the process of reclaiming, a lot easier. Some banks have phone numbers and/or online facilities where you can contact them about PPI.

Some banks have additional information on their websites, in branch or over the phone such as:

  • Leaflets explaining the process.
  • An explanation of how they calculate redress.
  • Details about how far back you can reclaim.
  • Dedicated portals or contact forms for PPI.

You can also contact them in the traditional way, using the Financial Ombudsman’s complaint questionnaire.

The Ombudsman offers a helpline you can use.

4

Go to the Ombudsman

If your bank rejects your complaint, you should take it to the Ombudsman. If you were rejected in the last six months, you can go straight to the Ombudsman, if it was longer than that you’ll need to restart the process with your bank.

The Ombudsman has an online complaint form.

If you prefer, you can use printed forms:

You can see some examples of complaints submitted to the Ombudsman.

The Ombudsman can only help with complaints about companies regulated by the FCA (formerly the FSA). From January 2005, all PPI sales were regulated by the Ombudsman but some earlier policies weren’t. 
If the company that sold you the insurance has gone under, you may be able to go to the Financial Services Compansation Scheme.
It is also possible to take your case to the small claims court but this will cost you and there’s no guarantee of success, however, some companies may be inclined to settle before it goes to court.