The PPI deadline is getting closer every day. The Financial Conduct Authority (FCA) has set 29th August 2019 as the official date. But, what does this even mean? Why is this relevant?
As you are likely aware by now, PPI (Payment Protection Insurance) was widely mis-sold to customers during the 1990s and early 2000s. Mis-selling tactics included telling customers the insurance was compulsory with products such as credit cards, loans and mortgages.
For over a decade, customers have been making claims to their bank or lender for mis-sold PPI and receiving a refund. To date, the banks have paid over £30 billion back to consumers.
For years, the banks have been setting aside money to refund customers, but a deadline has now been put in place. The aim of the deadline is to encourage people to make a claim, rather than put it off. The FCA wants to draw a line under the mis-selling scandal and allow businesses and consumers to finally move on.
If you think you might have been mis-sold PPI, or if you’re not sure, you must contact the bank before 29th August 2019.
How to Make a PPI Claim
Making a PPI claim is a simple, but potentially lengthy, process. The most important thing is to start now, because a claim can take a number of months and the banks will likely get busier as we near the deadline.
There are three main components of a PPI claim:
- Find old paperwork with evidence of mis-sold PPI
This can be the most challenging part for many people. If you can find your old financial paperwork with PPI listed then you have a case. At this point, you can contact a claims company to make a claim on your behalf or contact the bank yourself. If you can’t find any evidence or old paperwork, you can contact the relevant bank or lender to enquire. Alternatively, a PPI claims company will be able to check any old accounts for you.
- Make a claim to the bank
When contacting the bank, you will need to present the evidence of PPI (found on your paperwork) and explain how it was mis-sold to you. Do you remember being told it was compulsory or that it would increase your credit score? You can now also complain about the level of commission on your PPI — we’ll look at this in a moment. There are a number of ways that the insurance was mis-sold to consumers.
- The outcome: receive a refund or send the case to the Financial Ombudsman Service (FOS)
The bank should provide a response to your claim within eight weeks of acknowledging your complaint. However, if you have more than one case, or if it’s a particularly old account, it can take longer. When you receive your refund, you’ll be sent a breakdown of how much you will get back and how the payment will be made.
If your claim is rejected, but you believe that you have a strong case, you can refer your case to the Financial Ombudsman. Its role is to independently deal with rejected claims. However, the backlog of claims at the FOS is huge and it can take up to two years for a resolution.
What Is Plevin?
When researching PPI, you might have come across the term Plevin. Plevin refers to a PPI case made by Mrs Susan Plevin. Her precedent-setting PPI case changed the landscape for claims, meaning that thousands more people can make a case to their bank.
The Plevin ruling is all about the commission. Did your bank disclose to you how much commission was on the PPI sale? More than likely, the answer is no. Even if you knowingly bought PPI, for example, because you wanted it, you can still make a claim based on the commission if the following two conditions are met:
- The amount of commission was not disclosed to you during the sale
- The commission amount was over 50%.
During the case of Mrs Plevin, it was revealed that 71% of her PPI sale was a commission. This staggering amount means that people in similar situations can make a successful claim. At the height of the mis-selling scandal, it was common for banks to make 67% commission on the sale, meaning it’s likely you will have a case.
Even if your PPI claim is rejected, you can claim a second time based on the commission amount. However, if your first claim was successful, you won’t be able to make a Plevin claim.
Using a PPI Claims Company
PPI claims companies often attract negative press. From endless cold-calls to companies that have scammed people out of money without doing any work, it’s unsurprising that the industry has developed a poor reputation. But, for some, using a claims company isn’t always a bad option.
While you are able to contact the bank yourself and get your PPI refund, if you have no idea where to start with old financial products, or know you won’t get around to it before the August 2019 deadline, enlisting an honest claims company is the best solution.
Always find a no win, no fee claims company and check the amount they charge on successful claims. Thanks to a new government rule, PPI claims companies can no longer charge more than 20% + VAT (24% inclusive), but many companies charge less than this while still offering an excellent service.
Don’t delay starting your PPI claim. The PPI deadline will soon arrive and you don’t want to miss your opportunity to receive a refund.