What is PPI?


Below are some answers to frequently asked questions about PPI claims, if you cannot find the answer you are looking for here please call us on 0800 849 8060 and speak to a specialist PPI consultant.

What is PPI?

PPI is Payment Protection Insurance and was an insurance policy people took out to cover repayments on loans and credit cards in the event of being unable to pay back the loan due to an accident, sickness or unemployment.

Was every PPI policy mis-sold?

The simple answer is no, however some estimates think that nearly 90% of all PPI policies were mis-sold in one way or another. This was due to a variety of reasons however the High Court recognised the scale of the problem and that the lenders should pay back everyone that was mis-sold PPI.

If you have had PPI on any credit card or loan and you didn’t know you had it, weren’t sure what it was, were told you had to have it, were self employed, unemployed or retired, were pressurised into taking it or simply not made aware of the full cost of the insurance (these are just a few of the reasons PPI was mis-sold) then you should submit a claim.

The Financial Ombudsman Service has now stated that Payment Protection Insurance is the single most complained about financial product ever.

What’s the problem with PPI?

There are many problems with Payment Protection Insurance, including:

Mis-selling: Many consumers have been sold policies they can never claim on. The self-employed and students, for example, often can’t claim
PPI cover runs out: Before it was banned by the Competition Commission, single premium PPI (SPPPI) was often added as an upfront lump sum to your loan. Most PPI policies only last for five years, so if your loan or finance agreement term lasted for longer than this, you’ll still be paying interest on insurance that has long since expired

Over-priced: Adding PPI to a £7,500 five-year loan could cost a wholly disproportionate additional £2,000-£3,000

Short pay-out period: PPI linked to mortgages, credit cards or store cards usually pays out for a limited amount of time only. Often this is just 12 months

Low cover levels: On some credit card PPI contracts, the insurance only covers the minimum monthly payment, meaning your balance may never reduce

(Source: http://www.which.co.uk/news/2011/05/60-second-guide-to-reclaiming-ppi-252928/)

Are there any time restrictions on claiming my PPI?

No. However, the more recent the loan was active could make a difference to the success you may have. In principle the following guidelines may apply:

  • If the insurance was started in the last 6 years (even if the loan is now paid off) you should start a PPI claim immediately
  • If the PPI policy has been active within the last 6 years, even if it was started before this 6 year period, then you should start your claim immediately
  • If your PPI policy was not active within the last 6 years then this is where it becomes more tricky as lenders do not have to keep records over this time frame. However, if you have details of your loan, such as the loan agreement number and details of the PPI policy, then this will really help your chances of making a claim. In addition, the Financial Ombudsman Service doesn’t have an official cut off time and therefore if we had to refer the case to them you may still be successful.

Can I claim for more than one PPI policy?

Absolutely – you should claim for every PPI policy you have. Simply provide us with the details required for each lender and we’ll submit and manage a claim with each of them for you.

I have moved abroad, can I still claim?

Yes. Living abroad now doesn’t impact your ability to re-claim PPI charges at all.

What is PPI?

PPI is Payment Protection Insurance and was an insurance policy people took out to cover repayments on loans and credit cards in the event of being unable to pay back the loan due to an accident, sickness or unemployment.

What fees do I pay to you?

We operate on a no win no fee basis. What this means is that should we be unsuccessful in achieving a PPI refund for you then you will not pay us a penny.

Where we are successful in getting you a PPI refund, our charges will be 29% (plus VAT) of any compensation you receive. If you receive £1,000 in compensation, our fees are £290 (including VAT £348).

You will never be asked to pay us any fees up front.

How long will my PPI Claim take?

It is not possible for us to tell you exactly how long each claim will take, however on average across all PPI claims, they typically take around 8 to 12 weeks from you providing us with your completed claims forms.

The time a PPI claim takes to process can depend on the lender you a claiming from, the number of loans being claimed on, the amount of information you can provide us on your claims form, whether we have to refer to the Financial Ombudsman Service on your behalf and many, many more factors.

What we can say is that we will work as fast as possible on your behalf, keeping you fully up to date on the progress if your PPI claim at all times. We’ll even give you a personalised web page to see how your claim is going at any time of the day!

Why should I use The PPI Team?

We are here to save you the time and effort of making any PPI claim and ensure that you provide as much information as we need to get you the highest refund that is due.

We will be able to assess you completed claims pack and let you know if we need more information before we can process you claim. We’ll then negotiate with your lender, or lenders, and also involve the Financial Ombudsman Service should we need to – we’ll basically do all the running around and paperwork so that you don’t have to.

How much money will I get back for my PPI claim

We cannot give you an accurate refund figure without knowing your full circumstances.

Some rough estimates can be made by looking at the amount you pay for loan PPI which can be around 15% of your balance, however it can be much more. This adds up over the period of the loan and when you then add the interest into this you can be talking thousands very quickly.

You are entitled to a refund of your PPI,the interest you paid and 8% interest per annum since you purchased the policy – this all adds up to money you are entitled to claim back so start your payment protection insurance claim now.

Will my bank close my account or will this adversely affect my relationship with them?

No. Banks and other lenders have to refund mis-sold PPI and therefore this will not affect your relationship with them – you are legally entitled to claim mis-sold PPI back.

How much provisions have the banks set aside?

Lloyds PPI provision almost £10 bilion

Barclays PPI provision almost £4 billion

RBS PPI provision over £3 billion

HSBC PPI provision almost £2 billion

(Source: http://news.sky.com/story/1205528/lloyds-ppi-mis-selling-provision-up-by-1-8bn)