Approximately 64 million PPI policies were sold in the UK, mostly between 1990 and 2010 but with some sold as far back as the 70s. However, the mis-selling of PPI has resulted in a nationwide “PPI scandal” and a ubiquitous campaign urging consumers who were mis-sold PPI to seek the services of the best PPI claims companies.
What Is PPI?
PPI (Payment Protection Insurance) was commonly sold with products that required repayments. These include:
- Catalogue credit
- Credit cards
- Finance agreements/hire purchase (for example, car finance or anything bought on credit)
- Home improvement loans
- High street store cards
- Home shopping accounts (including catalogue accounts)
- Loans (business, personal and student)
- Loans secured on a home (in addition to a mortgage)
- Mortgages (including second charge mortgages, for example, for a home extension)
What’s the PPI Problem?
PPI was designed to cover loan or credit card repayments in the event of accidents, ill health or unemployment. The policy itself was technically not a “bad” product, but the widespread mis-selling of it has resulted in over £34 billion in customer repayments, as well as mistrust of many lenders. Some of the ways in which customers were mis-sold PPI included:
- A customer’s medical condition was not taken into account
- Their employment status was ignored
- Customers were falsely told that PPI was compulsory
- PPI was automatically added without their knowledge or consent.
Moreover, PPI was easily missed by customers, as it was often listed under a number of different names, including:
- Accident, sickness and unemployment (ASU) insurance
- Account cover
- Card Protector
- Credit insurance
- Credit protection
- Loan care
- Loan insurance
- Loan protection
- Loan repayment insurance
- Mortgage payment protection insurance (MPPI)
- Payment cover
- Protection plan
The PPI Deadline
So far, millions of customers have made successful claims, but the Financial Conduct Authority (FCA) selected 29th August 2019 as the official deadline by which customers can make a claim. The deadline aims to draw a line under the financial scandal that has spanned more than a decade and amassed billions of pounds.
How Do You Claim Mis-sold PPI?
You can check if you were mis-sold PPI by doing either of the following:
- Contacting the bank or lender with which you took out the relevant policy and making a claim yourself.
- Consulting a credible claims company, which will do a lot of the heavy lifting for you and keep you updated throughout the entire process.
You can also run a credit check to determine which banks and lenders you have had financial products from within the last six years. It’s important to note, however, that this will not confirm whether or not you were mis-sold PPI — you will still need to gather the relevant paperwork, or consult the lender or a claims management company, to determine this.
Once you’re confident you have evidence of mis-sold PPI, you need to act fast and launch your claim before the looming deadline. Staying organised and having your paperwork before making your claim can help to prevent any delays in the process. The best PPI claims companies use effective claims management software for a smooth claims process and to generate the most efficient results. Needless to say, if you plan on making your claim independently, organising your documents and paperwork — and staying on top of contact with your bank or lender — are key for a straightforward application.
What Is Plevin?
The Plevin rule applies to the amount of commission earned on a PPI sale. In 2014, Mrs Susan Plevin, under the impression that PPI was mis-sold to her, lodged a complaint against Paragon Personal Finance. During the case, it became apparent that 71% of the PPI sold by Paragon to Mrs Plevin was a commission. She argued that this, having not been disclosed to her at the point of sale, constituted a form of mis-selling. The case was ruled in favour of Mrs Plevin, setting a precedent for many more consumers to claim back PPI due to the amount of commission on the sale. Following the judgement, the FCA declared that a bank or lender will have to repay the customer if it earned more than a 50% commission on a PPI sale and that it was undisclosed.
The Plevin rule can be used to argue the case for a PPI refund for those who intentionally purchased PPI but were not told how much of the sale comprised a commission. It also allows those who have previously claimed for PPI and been unsuccessful to claim again based on the commission amount. In general, you can complain about a commission if:
- You took out the financial product the PPI was sold with (for example, a loan or credit card) on or after 6 April 2007
- You took out the financial product the PPI was sold with before 6 April 2007 and it was still running on or after 6 April 2008
- The commission on the PPI sale was undisclosed and more than 50%
- You have not previously made a successful PPI claim for the product you wish to make a Plevin claim on.
Even if you’ve had PPI that has been “credibly sold” — in that you were entitled to PPI, you intended to purchase it and it was not added without your consent, for example — it’s worth finding out whether the Plevin rule applies.