It was 2011 when banks finally flew the white flag of defeat in their fight over payment protection insurance mis-selling compensation. If you’ve ever owned a credit card, loan or had any other finance agreement, you too could be entitled to compensation.
What is PPI?
PPI, also known as Payment Protection Insurance, is a service offered alongside credit cards, loans or any other personal finance agreement whereby it guarantees that payments on agreement would be made if the borrower was to become unemployed or sick – thus unable to keep up their repayments.
However, the problem is that an incredible amount of people that had taken out PPI soon discovered that the policy was useless to them if for example they were retired or are self employed (there are numerous other reasons why the policies were flawed too, but these were the major ones).
This has meant that banks now must go over all of their previous customers who purchased their PPI service and advise them that they could be entitled to a refund on any premiums paid – an enormous blow to many banks – however, it is one that was indeed justified.
The FSA Demands That Banks Inform Customers Where They See Issues With How PPI Was Sold
The liability on identifying customers that were mis-sold PPI is with the banks and the FSA rules require them to contact the customers where they see any systemic issues with the way their PPI was sold advising them that they could be eligible for a refund on their premiums.
The Banks are required to send out letters to all customers that it feels were affected by mis-sold PPI along with instructions on how to claim.
So What Do I Do if I’ve Got a Letter?
If you’ve received a letter then it means that your bank has identified your account as being one that could’ve been affected by mis-sold PPI and the letter should give instructions on how to begin your claim.
At this juncture, it may be a good idea to seek the help of a company that specialises in PPI reclaims for you, as it can be a bit of a minefield and also enormously time consuming. Here’s a fantastic article that advises steps on how to choose the best PPI claim company.
I Haven’t Got a Letter? Does That Mean No PPI Reclaim?
If you didn’t receive a letter from the bank it doesn’t mean that you’re not entitled to claim PPI. Letters are normally sent to customers that the bank feels have been mis-sold PPI because of a systemic failing (which normally means that the letters are sent out in batches to customers that it feels were affected).
It could still mean that you were mis-sold PPI through the actions of the sales person who originally sold you the insurance or because of various other reasons. This is also another good reason why it’s probably good to seek the help of a professional PPI company as they can assess your eligibility and likelihood of success from a claim.
Remember, PPI isn’t JUST Banks
The FSA’s guidelines do not just apply to banks, they apply to numerous other financial contracts that include PPI. These can be such things as car leases, credit card lenders or loans – any financial agreement that you have in place you should check to see if it was sold with PPI protection.
Good luck in your claim!
By Jamie McKaye
