PPI – the banks are still braced for more claims. Here’s how to get back what you’re owed
When you think of PPI, you might think of irritating cold calls, spam emails and infuriating advertising jingles on radio and on daytime television.
You might also think that PPI is over now. That the compensation bonanza has been done to death and all that’s left is claims management companies desperate to help the public pick the last bit of meat off the carcass of mis-sold PPI policies… and take a chunky slice of any compensation in the process.
This couldn’t be further from the truth. Although the Financial Conduct Authority is planning to put a time limit on PPI claims, this won’t happen until summer 2017 at the earliest. Even then, the stopper will only be put on claims to years after the rules are set… which gives you until 2019 at the earliest.
The banks know this, too – Barclays has just set aside and extra £400m to help repay victims of rogue mis-selling.
So exactly what was PPI mis-selling? And why was it such a scandal?
PPI stands for payment protection insurance. Basically, if you have a PPI-covered loan (or credit card) and you can’t make repayments because you’ve lost your job or had an accident at work (or indeed many other reasons), your insurance policy will meet your repayments when you can’t.
If that sounds good, it is… unfortunately, millions of policies were sold over the past couple of decades because they made far more for the insurance companies and banks than the payouts cost. That meant banks and their staff were incentivised to push you into purchasing PPI – whether it was suitable or not.
But isn’t claiming back PPI ridiculously complicated?
I would be lying if I said that managing your own PPI claim was simple, but there is absolutely no need to go to a self-styled ‘PPI specialist’, who will take up to 30 per cent of any compensation you might be awarded.
Firstly, most banks – the biggest sellers of PPI – have downloadable forms available for you to fill in. Even if they don’t, the Financial Ombudsman Service also offers its own comprehensive downloadable form (we’re also creating our own PPI forms at resolver.co.uk, which should help smooth the process still further).
Do your research
Once you’ve got a form, the most important thing is to go back through your own financial records and get as much information as you possibly can – account numbers, repayment details, statements, accumulated interest charges, basically anything to do with the loan or loans you had PPI on. The more info you can provide, the better your chance of getting back what you’re owed.
Then it’s really a case of sticking with it – answer your bank’s questions as honestly as you can, and chase them if they’re not responding to your requests. And if they refuse you, you can still take the case up with the ombudsman.
But it’s not just PPI… what about packaged bank accounts?
The packaged bank account
Packaged accounts are where you pay a set fee – generally on a monthly basis – in return for additional benefits, such as various forms of insurance, or sometimes discounts for certain products or services.
They can be really good – if you are likely to make the best use of the additional benefits – as it can be a great way to get cheap insurance. But often they only double up on products you are already covered for - mobile insurance, travel insurance and the like.
So if you feel like you’ve been pushed into it by the bank’s sales staff, you could well be due quite a bit of compensation, especially if you’ve held the account for some time.
If you do think about keeping your paid-for bank account, you need to carefully consider if you can get the same insurance and other products elsewhere. If it doesn’t add up, then you need to think about reclaiming.
When can you reclaim your money?
If you have a packaged bank account and think you have been mis-sold, you can submit your claim via Resolver. Once your email has been submitted the bank has eight weeks to resolve your issue; Resolver will then remind you to escalate your case.
The bank might not respond directly to your Resolver account, but you can record your phone calls and upload any supporting documents into your Resolver case file.
At resolver.co.uk, we’ve already helped tens of thousands sort out their unfair packaged bank account charges – so don’t miss out!
How much will you get back?
If you have been mis-sold, you will receive back your fees back plus interest. The Financial Ombudsman Services calculates interest at 8% per annum. As this is an income, be aware that you should report any interest to HMRC.
The interest is calculated at 8% per annum, but is not compound interest: that means you will not receive interest on the interest.
Helpful hints when making a complaint about finance
• Get your complaint in writing - this is the easiest way of making sure it gets recorded properly
• If you do need to make a phone call, Resolver can record it and store it for you in your online case file.
• Record as many details as possible - who you speak to, their job titles, the dates and times of your calls with them. Resolver can do this for you, but it’s worth making the effort to record details yourself, too.
• Be polite. You might well be really frustrated and irritated about the service you’ve received, but it’s important to keep calm, especially if you’re complaining to the Financial Ombudsman - effectively a third party that has had nothing to do with your complaint other than an intent to solve it.