Reclaim PPI

Reclaim PPI

Payment Protection Insurance (PPI) is an insurance policy which covers the repayments to a debt if you can’t pay it. It’s possible to reclaim PPI if the policy was mis-sold to you.

What is PPI?

PPI makes the payments to a credit agreement, like a loan or a credit card, on your behalf if you are unable to pay it. This could be because of an accident, sickness or unemployment.

Some customers have benefitted from PPI cover. However, others were mis-sold policies that they could not claim on, or told that having the insurance was a requirement of borrowing the money. In these situations you may be able to reclaim the money you have paid into the policy so far.

PPI was mis-sold if you were:

  • Unaware you had it
  • Not given enough information about PPI to be fully aware of what you were paying for
  • Told you had to take out PPI to get the credit
  • Never eligible to claim on the policy

If you took out PPI it will show on your original paperwork. If you don’t have this paperwork you can check your credit file. But this will only show active debts from the last six years.

Reclaim mis-sold PPI for free

There are lots of fee-charging claims management companies offering to reclaim mis-sold PPI for you. Most will charge commission on any money you get back. If your claim is successful you may end up paying the company a large sum of money. You don’t need to pay this, as you can reclaim mis-sold PPI yourself for free.

You’re just as likely to successfully reclaim mis-sold PPI yourself as if you go through a claims management company.

How to reclaim PPI

To reclaim PPI for free read this MoneyAware blogpost which explains everything you need to know. We recommend you use the free template letters on the or Which? websites.

If the lender rejects your claim you can appeal to the Financial Ombudsman Service (FOS) if you feel the claim’s valid. As a government service the FOS will independently review the case and make a ruling free of charge. This may take some months due to the high volume of PPI complaints.

PPI reclaim

If your mis-sold PPI claim is successful you’ll receive compensation. Your lender may send you the refund by cheque. Or, if you have missed payments to your debt, the lender may use the refund to reduce the amount you owe them.

PPI refund

If you’re currently paying into an individual voluntary arrangement (IVA) or a debt management plan (DMP) any PPI refund should go towards paying off your debts so you become debt-free quicker.

If you’re currently bankrupt or have a debt relief order there may be consequences from reclaiming your PPI. Please visit us for more advice

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