Payment Protection - An Online Free Guide

In the UK the escalating controversy regarding the wide spread mis selling of Payment Protection Insurance, or PPI, shows no signs of letting up, with figures released last month showing most banks saw a dramatic increase in the volume of complaints in the second half of 2011. Barclays was the unlucky recipient of 'most complained about bank' stigma, although they only 'win' the individual bank award. The worst culprit as a group was Lloyds TSB, who own a number of other High Street Banks.

As well as banks, thousands of complaints were lodged against consumer credit organisations, consumer finance companies and even the seemingly more reputable insurance companies. It would seem that banks are prepared for the 'long haul' as well, as figures released in April show that the amount of recruitment going on in the banking sector is at a record high. This is largely being driven by banks recruiting qualified staff to field the vast amount of calls they are getting from unhappy consumers! The British banks have been in a similar position before, following the endowment policy misselling scandal which caught them severely understaffed, leading as a result to even greater consumer disgruntlement.

So what can you do if you think you were mis-sold Payment Protection Insurance?

Well, there are a couple of avenues you can explore. The simplest is to print off a ready made PPI Claim Letter and tailor it to fit your own situation. Banks are now experienced at receiving these letters, so there's no need to worry about making your letter too detailed, just an overview of why you feel aggrieved.

By law the banks then have eight weeks to respond to your claim. If they do not, or if they respond and you do not agree with their findings you can then go to the financial ombudsman to ask them to provide an impartial review of your claim. They will do so, and decide whether you are due compensation or not. You will need to be patient with the Ombudsman - they can take up to twelve months to decide on cases. However with some of the compensation amounts being awarded it is well worth approaching them and then 'forgetting' about if while they look into your claim.

To assess if you were mis sold PPI there are a number of avenues to consider. Firstly you need to have your PPI agreement and Terms and Conditions to hand as the wording differs between lenders. Bear in mind that if you bought the PPI online, you may have less of a case as the onus is on you to read through the terms and conditions and decide whether it is suitable. If you were sold your PPI by a person though and feel that they did not adequately explain the policy and its exclusions then you should consider pursuing compensation.

If your policy covered unemployment but you were unemployed at the time you took out the cover you could be able to make a claim. If the staff encouraged you take out the policy anyway, or did not ask about your employment status, you are in with a good case. If you were advised of the exclusion but decided to take it anyway, then you will have less of a valid argument.

They also normally (although you need to double check) exclude existing medical conditions as well as common complaints such as back ache and stress. If these omissions were not explained to you by a member of staff, you should consider making a complaint to your lender.

Its also worth doing some research online to see if your seller has already been penalised by the Financial Services Authority. If so, you could have good grounds for pursuing compensation.

There are other grounds for compensation such as feeling unduly pressured to take out the policy by the member of staff, or being told that you would not get the finance if you did not take out PPI (which lenders are not able to insist you take through them). Also, if you had existing cover which would have performed the same job as PPI you should have been asked about this by the seller - if not, again, you could be able to pursue compensation.