Hasta la vista, PPI
As Arnie fronts new ad campaign, Consumer Features Editor Nada Farhoud tells you how to claim
Millions of victims of the PPI scandal are being targeted in an all-out compensation blitz. City watchdog the Financial Conduct Authority yesterday fired the starting gun on £42million campaign to get people to lodge outstanding complaints before a deadline in two years’ time.
A new TV and cinema advert featuring a robotic version of Terminator star Arnold Schwarzenegger, famed for his “hasta la vista” catchphrase, urging people to “make a decision” over PPI claims and to “do it now!”.
The misselling of PPI – payment protection insurance – is the biggest scandal of its kind in UK history. So far about 12 million people have received compensation for policies sold alongside loans, credit cards, mortgages and other debt, averaging £1,200 each.
But it is thought up to 45 million policies may have been sold and experts estimate the final bill to banks and financial fims could hit £100billion.
And thousands more victims may be owed compensation, even if they previously had a claim rejected, thanks to a change in the rules.
Alex Neill, managing director of Which? said: “It is worrying so many are unaware of this deadline, while others have been put off from claiming because they think it’s too much hassle or they don’t want to pay a fee.”
Are you one of the millions who could be owed thousands?
Here we explain how to find out if you are entitled to claim – even if you can’t remember the details or whether you were sold a policy.
WHAT IS PPI?
Payment protection insurance was sold to consumers who got a loans, credit cards, mortgages or overdrafts in the past 30 years.
They claimed to cover payments when a policyholder fell ill, had an accident or lost their job.
But the insurance was useless for a large number of customers because they would be unable to claim if, for example, they were self-employed or retired.
Others were unaware they had even been sold the policies.
A new ruling, which is fully accepted by the industry, means banks must trawl their records for PPI policies which were missold.
WHAT HAS CHANGED?
BANKS have been fined repeatedly for failing to deal with complaints properly and some cases may have been wrongly rejected.
If your claim was rejected by your bank or lender you can take it to the Financial Ombudsman.
But before doing that, it’s also worth considering the new rule.
In 2014, a court found Susan Plevin was unfairly treated because she wasn’t told a large amount of commission (71.8%) was taken from her PPI payment.
Now if more than 50% of your PPI bill went on commission to the lender and you were not told about this then you are due a refund – plus interest. Research shows the average commission was in fact 67%.
The rules have been established by the The Financial Conduct Authority, but didn’t come into force until yesterday. Customers can now submit a claim under these terms, but only have two years do so, meaning more than 1.2 million people who had past claims rejected can have their case reopened.
The founder of Moneysavingexpert.com Martin Lewis explained: “Up until now, you were only due money back from PPI if the firm had either given you an inappropriate policy, such as employment cover for the self-employed, or lied to you saying PPI was compulsory.
“But with Plevin in most cases it’s simply a case of ‘Did you have PPI?’ Then you are owed money.”
HAVE I PAID PPI?
There is no such thing as an automatic right to PPI compensation – you have to file a complaint.
Countless people may have had the insurance added to their policy, despite it being unsuitable, without ever realising.
If you are unsure or cannot remember, you can make a complaint for free in a matter of minutes through Resolver.co.uk.
Other PPI checkers are based on questions about loans and credit, but Resolver’s tools help you establish if you have had a policy.
It gets firms to check their databases even if you don’t have all the details of the original loan or credit agreement.
Once you have the information you need, you can use the site to personalise your complaint, rather than use a ‘cut and paste’ template.
You can also check by looking at your credit file through Equifax, Experian or Callcredit.
“Look for something that may be called ‘payment cover’, ‘protection plan’, ‘ASU’, ‘loan protection’, ‘retail payment protection’, ‘loan care’ or similar,” MoneySavingExpert.com recommends.
You can also contact your lender if you don’t have paperwork, by asking for a copy of your agreement to the terms and conditions dating from when you took it out, as the terms may have changed.
HOW TO COMPLAIN
For those turned down in the past but who think they are entitled to compensation, Resolver.co.uk has a Plevin complaint tool.
Built in collaboration with the banks it can also help those who may have been overcharged commission and will help them raise the case again with the firm.
Also never, pay a claims manager. They don’t improve your chances of winning and if you do, they charge you a huge chunk of your payout while getting you to provide all the information.
Policy expert at the Money Advice Service, Andrew Johnson said: “There’s rarely a need to use claims management firms to reclaim missold PPI, who often charge a large commission.
“Help on how to complain to financial firms directly, and if necessary to the ombudsman service can be found on moneyadviceservice.org.uk.
Alternatively you can visit the The Financial Conduct Authority’s new micro site ( fca.org.uk/ppi) or call 0800 101 8800.
If you don’t have access to the internet you can also contact your lender for details and ask for the paperwork to be sent to you, or call the FCA’s new phone line on the above number.