PPI Frequently Asked Questions

Here’s a list of a few very common questions that I get all the time, hopefully this will clear up some of the confusion.

What is PPI?
PPI is a type of insurance that was often sold with credit card applications or personal loans as protection in case you were unable to keep up repayments. It’s not the product itself that was bad merely the miss-selling of it to people who did not need it. The banks were so keen to sell it as they were often making twice as much selling the PPI product as the actual loan!

How do I know if I can make a claim?
There is a very good chance you can make a claim as most people taking out a loan or credit card over the last 10 years have been offered PPI at some point. It’s for this reason that’s its worth taking the time to check your paperwork to see if you can make a claim. Payment protection insurance will always be listed as an extra in the details of the loan, so check carefully.

Will my solicitor ask for money upfront to pursue my claim?
No, solicitors or claims management companies should not ask for money up front (if they do walk away). All should be willing to work on a “no win no fee” basis which means you don’t have to pay anything until your claims is successful. This means they have to evaluate your claim and judge how likely it is to succeed, either way there is no risk to you.

How long does the average claim take?
This is a very common question because everyone wants to know how long it will take to get their money. However there is no easy answer as every claim is different in terms of complexity, some take 3 months while others can take up to 8 months to resolve. You also have to bear in mind that some banks are much quicker than others in how long they take to evaluate and settle a claim.

Can I make a claim myself without a solicitor?
Yes you can however you must realise that the claim may eventually go to court and you will need to have the technical know-how to deal with this situation. You also have to be aware of whether or not a settlement amount is reasonable based on the facts. If you go with a claims management company they will have lots of experience on how much you should get for your specific claim. While it may be tempting to get 100% of your claim settlement by pursuing action yourself, you could lose out in the long run.

How far back can I claim?
The average max for a claim at the moment is 6 years however it is possible to claim up to 15 years ago in some cases. However the further back the claim the more paperwork and evidence you will need to produce. However since it costs nothing to find out if your claim is possible or not it’s worth taking the time the fill out a few details and let the professionals decide for you.

Is PPI the only financial product you can claim back?

Well in a word no because it’s now coming to light that there’s a range of financial products that have been mis-sold over the years. What this means for you the consumer is that if you have been mis-sold a package it will be possible (with the help of a solicitor) to reclaim damages from these companies. It’s also worth noting that the amount you can re-claim in damages can often vastly exceed the amount of the insurance in the first place. For example if you took out a simple PPI claim at £15 per month you could still be in line for a claim of £3000+ in compensation. You see the money returned is not as a reimbursement it is compensation and there is a difference. You are being compensated for being sold a product (PPI) that you didn’t need in the first place. But apart from the amount of money you can claim back what are the other types of insurance that have been mis-sold?

Your PPI Claim

Identity theft insurance
This is another financial product that was often sold by the credit card companies when people where applying for a card or even just ringing up to ask as question. The idea was that they protected you from loss in the event that someone used your details to gain credit on your account. It’s not a bad idea in practice but the reality is that banks are required by UK law to protect you anyway so in effect they are just selling you something which you already have! The thinking is that identity theft insurance will be the next scheme to come under the spotlight in the UK for possible claims by consumers, it may be worth checking out with your solicitor if you can already claim.

Packaged accounts
The only other product that I’ve heard about being claimed on is “packaged accounts”. These were current accounts at banks were you had lots of extras thrown in like travel and mobile phone insurance. The problem was that these accounts often had extra fees running into hundreds of pounds to cover these extras and more often than not the customer was not told about these extra costs (very similar to your average PPI claim).

I’m sure there are some other schemes coming under the spotlight and ill be writing about them here as soon as I know more, until next time.

How long does it take to complete a PPI claim?

This is a question we get quite a lot here at PPIClaimer and it’s probably the hardest one to answer as there are so many variables in each case, for example:

Did you complete all the required paperwork as soon as possible?
How long does it take for the lender to respond?

In most cases it’s the lender that will be holding up the process and not the claimer as they have initiated the process to start with so there won’t usually be a delay there. However to outline things the process goes a bit like this:

You decide you are going to make a claim and send in some details of the loan such as the amount, date applied for and account number
The claims management company will then send you a letter of authority which allows them to contact the bank or lender on your behalf.
The lender then has 40 days to respond and they will either reply with an offer or dispute your claim. In the event of a dispute they will usually be implying that you did not have PPI insurance with your loan or credit card.
If you accept the offer you will receive a cheque in around 3 – 4 weeks.

Complications

Things don’t always run smoothly and there can be problems with both the claimant and the lender. The most common problem with the claimer is that they don’t have a copy of the original loan agreement. This means the claims management company has to request a copy of the agreement from the lender under the data protection act, this can prolong the process.

The main complication with lenders and banks is the amount of time they take to process a claim. For instance in my last post I mentioned that Lloyds had recently been fined for taking too long to process their PPI claims, but hopefully this action will help to speed up other banks into processing claims faster.

Conclusion

The main point to get across about this whole process is that after the initial paperwork is returned to the solicitor or claims management company there is very little work to be done on the claimers side of things. If there are delays (which often happen) it will usually be the solicitor who is chasing the bank to make the claim go faster. All you have to do is wait for the money to arrive at the end of the process. So I suppose in that sense it really is about as close to money for nothing as you can get!

PPI advice video from Which

Just thought I would quickly share a great new video on PPI from the consumer magazine Which, see below:

The nice thing about this video is that it spells out lots of the basics on payment protection insurance and some very common questions that people have. One of the main points of the video is that you don’t necessarily need a claims management company to submit your paperwork as you can actually do it yourself. Whilst this is true I feel I should also mention that having someone else handle all of the claim details is going to be much less stressful. Also it’s worth bearing in mind that a qualified solicitor with experience in PPI is probably going to get you a much higher settlement compared to doing it yourself.

Whilst I’m writing this post I also noticed that Lloyds was recently fined over £4 million for delaying many of their PPI payouts. It’s a tactic that doesn’t really surprise me as the banks have been dragging their heals for quite a while with claims. I suppose you could see this as another reason to get a professional involved to hopefully speed up your claim? As always the choice is up to you…

Welcome to my blog

So what is PPI?

PPI is the insurance lots of people took out when they applied for a new credit card or loan with many of the main UK banks. The purpose of the insurance was to protect peoples credit ratings if they were unable to keep up the repayments and effectively freeze the loan.

What was the problem?

PPI isn’t inherently a bad product as many people do wonder how they will continue to pay if they lose their job etc. But because the banks were often making more money from selling the insurance than they were with the actual loan they really put the hard sell on for this product when customers called.

What’s happening now?

The government has decided that all of the customers who took out PPI insurance should be able to get compensation because they were miss-sold it on a fundamental basis. So now anyone who did take out PPI can claim it back by using a solicitor or specialist claim company and because it’s so easy to get compensation thousands of people are claiming it back every day!

The last point about it being relatively easy to claim back the insurance is true because you don’t even need to have any paper work in order to claim. All you need to know is your lender and when you took out the loan or card, that’s it! I suppose there’s the thought that there may be a lot of work involved which puts many people off trying to get their PPI back, but it really is worth the effort I promise!

I should also mention at this point that any claim management company that claims on your behalf will charge you a fee for doing so. This will usually be a percentage of the final amount you receive back from the bank although I have heard of some companies charging a flat fee for the claim but it seems to be rare.

How much can you get back?

This all depends on the PPI type that you took out with the loan so it’s really hard to give an average figure for all claims. If pushed though I would say that the average is around £2,500 which is quite a lot when you think about it when you don’t really have to do anything to get it. All you have to do is fill out a short form with a few of your details and hit submit and then you let the claims company do all the work.

That’s about it for this first blog post, hopefully I have explained some of the basics surrounding PPI as there seems to be a lot of confusion around how it works. I will be back soon with more posts on how you can claim and news in general.