Mis Sold PPI Online Guide

What is mis-sold PPI?


Payment Protection Insurance (PPI) is a form of insurance which is taken out to protect the repayment of debt in the case of the borrower being unable to make payments due to being made unemployed, or suffering, illness, incapacitation or death.

PPI was mis-sold to millions of people across the UK. PPI is classed as mis-sold if: it was added to a loan product without the policyholder's knowledge; the policyholder was misled into believing that PPI was not optional; the policyholder was told that a loan or credit card was 'protected' without the full conditions or cost of the PPI being explained; or if the policyholder was led to believe that PPI would help with the approval of a loan. The mis-selling of PPI happened online too; when lenders presented loan borrowers with pre-ticked boxes offering PPI cover, rather than letting borrowers 'opt-in'.

The mis-selling of PPI happened on a huge scale, with around a quarter of all PPI policies estimated as being mis-sold. This went on for a decade until April 2011. The courts then ruled in favour of the consumer, and banks and other loan companies were told they must return around £4bn to 2.5 million people. This money is only going to be returned to consumers who make a valid PPI refund claim.

Now you understand the definition of mis-sold PPI, you may realise that you are one of the victims. Look through your loan agreement and find out if you have been paying money for 'payment cover', 'ASU', 'payment protection', 'loan protection' or a similar term. If you feel that these policies were sold to you under the false pretences mentioned above you are due a refund, even if the loan which your PPI was covering has been paid back.

You may find that your PPI was paid as an additional charge with each loan repayment, or as a one-off payment at the start of your contract.

A credit report will list all of your financial products for the last six years, so this might be useful if you do not remember who your lender was. It doesn't matter if you don't have a copy of your paperwork for your loan either; once you know who your lender is, you have a legal right to obtain a copy of your original agreement from them for £1. They may not provide the agreement if your account is closed, but you can ask for a full breakdown of your account for an additional charge, which will show PPI payment transfers.

The rules of mis-sold PPI claims state that you can usually only claim if your account was active within the last six years. So as long as you were still paying back a loan and its mis-sold PPI six years ago, even if the loan was taken out ten years ago, you are due a claim.

How much can I claim?

A good Payment Protection claims management company will tell you whether you are entitled to make a mis-sold PPI claim, as well as guiding you through the claims process. You will not be able to reclaim your full loan, but the mis-sold PPI on that loan will likely still be a sizeable sum which you can reclaim.