Since The British Banking Association made its shock decision not to challenge the High Court's PPI ruling, lenders have been stepping forward to confirm the allocation of funds to finally resolve the issue. So far, Lloyds have pledged £3.2 billions, Barclay £1 billion and RBS £850 million. These are huge sums of money, but what does this mean to consumers? What is PPI, who is entitled to claim a refund and, perhaps more importantly, how do you start the claims process?
Step 1 - Do you have PPI?
PPI stands for Payment protection Insurance and it is a type of cover sold alongside credit and store cards, loans, mortgages and hire purchase agreements. It can be known by a number of different names including: Payment Cover; Lifestyle Protection; sickness; accident and unemployment cover; loan cover and MPPI. Although it may have a different name, in essence, the policies are all the same. They are designed to cover the policyholder if they cannot work due to accident, sickness or redundancy by stepping in to cover repayments. As well as being similar these covers are all equally controversial because they have all, at one time or another, been mis-sold.
Step 2 - Was my policy mis-sold?
If you have PPI, the next step in the claims process is to find out whether your policy was mis-sold.
- Were you told you had to have the cover? PPI was never compulsory, if you were told you had to have the cover you were given the wrong information.
- Were you told taking the cover would improve your chances of being given credit? The decision as to whether you are suitable for the loan, mortgage or credit card is based solely on your circumstances and credit rating. Whether you took out PPI or not would have no bearing on your lender's decision - if you were told it would you were given the wrong information.
- Were you pressured into taking out the policy? Many salespeople used high-pressure sales techniques to force through sales. If this happened to you, you have the right to make a claim.
- Were you sold a policy that would not cover the whole life of your loan? Many people were sold what is known as a 'single premium policy.' These policies typically only last for five years and are very expensive. Unfortunately, many people - who had taken out a loan for more than five years - were sold the cover without being told it would not cover them for the life of the loan.
- Were you sold a PPI policy even though your circumstances made you unsuitable? Because of a lack of training, many staff tried to sell policies to everyone without considering whether they were suitable or not. Personal circumstances that may make you unsuitable include: being above the age of 65; being unemployed, retired or in full time education; having a pre-existing medical condition.
- Were the full costs, terms and conditions explained to you? In order for you to make an informed decision whether the PPI policy was right for you, your lender should have fully explained all the costs, terms and conditions involved. If this did not happen you could make a claim.
If any of the above circumstances apply to you, you can make a claim. Still not sure whether your policy was mis-sold? Call our claims team on 0207 471 2000.
Step 3 - What should you do next?
If you believe you have been mis-sold a PPI policy the next step in the claims process is to make a complaint. To get started simply complete the quick claim form above. We will send you out a pack in the post for you to complete, sign and return. Once your pack is back, we guarantee to start your claim in 24 hours and we resolve many claims in just 8 weeks. We have a vast amount of experience dealing with banks and other lenders as well as The Financial Ombudsman Service and we aim to make the claims process as simple as possible.
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