Wallet Doctor money saving advice on PPI insurance.

LOANS, CREDIT CARDS AND MORTGAGES.

Anyone who’s got or had personal loan, secured loan, credit card, store card or catalogue credit may be able to reclaim £1,000’s. The miss-selling of Payment Protection Insurance (PPI) on these products has been so severe,  some people may not even know that they have it. This is step-by-step guide, including template letters to reclaim the cost of the loan and card insurance.

PPI is a hot topic, with two of the main consumer regulators, the office of fair trading (OFT) and the financial services authority (FSA), carrying out investigations into high-pressure selling tactics that have resulted in so many policies being inappropriate and therefore miss-sold.

WHAT DOES RECLAIMING INVOLVE? 

Unlike just cancelling loan insurance, reclaiming means that not only are you going to save money on future payments , you’re also getting a refund on the money already paid because the policy was miss-sold. All you need to do is check if you fit into one of the miss-selling categories, send a letter to your lender and in the worst case scenario, take your complaint to the Financial Ombudsman Service or other relevant trade association, which is completely free.

HOW FAR BACK CAN YOU GO?

If your policy has started in the last 6 years, even if you are not still using it, you can obtain a copy of the paperwork from the lender if you no longer have it and reclaim.

If your policy was started over six years ago and you are still using the policy or even if it has ended in the last six years, again, if you have no copy of the paperwork we can ask the lender to provide one, however if you were aware of the miss-selling or have already complained your chances of success may be slightly reduced.

If your policy ended over six years ago and you are still in possession of the paperwork, you may still reclaim, although again the success rate may be reduced slightly depending on your recollection of the transaction.

If your policy finished over six years ago and you have no copy of the paperwork, it is not viable for you to make a claim. The lenders are only obliged to keep customers records for six years, therefore if no party has a record of the contract it is unlikely that claim would prove to be successful.

WHEN NOT TO RECLAIM.

If you have made a claim on your policy and received a payout, you cannot claim that the policy was miss-sold so this system is inappropriate and does not apply to you, however you may still be able to cancel your insurance policy.

PPI: WHY IS IT SO OFTEN MISS-SOLD.

PPI  as many of you may or may not be aware PPI is a huge revenue for lenders with less than 25% of claims proving successful, these companies make vast sums from PPI, often outweighing the profits generated by the loans themselves.  You will find invariably that money lenders  quote the repayments with the PPI included, the lenders are clever with their wording as often they will use terms like “ the loan is fully protected” instead of actually telling you that its insurance quoted within the policy. This also applies not only to loans, but also store cards, credit and catalogue cards.

There are situations where PPI can be beneficial for the borrower, the main issues however lie with the appalling overpricing and Lack of cover provided within the policies, the following facts are important for policy holders to be aware of.

THE COST OF THE INSURANCE WILL NOT BE INCORPORATED WITIN THE APR RATE.

If you take out a loan with PPI the Apr rate you pay is irrelevant, a loan with a higher APR rate could still work out cheaper than one quoted with a lower rate as the PPI is not incorporated within the actual loan and is calculated separately.

It is possible to cover yourself with a similar level of security by buying a specialist insurance policy which remains completely separate from the loan, often saving up to 60%

If you took out the PPI policy to run in conjunction with your loan, you should be within your rights to cancel it, obviously you must check that this is possible and if indeed it is you must then examine whether or not you need it. If after checking you can either cancel it ,or follow the directions above and opt for a stand alone policy thus giving you the cover required and saving you money at  the same time.

“HAVE I BEEN MISS-SOLD”

If you fall in to one or more of the following categories you may have been miss-sold PPI.

ARE YOU SELF-EMPLOPYED,UNEMPLOYED, RETIRED OR REDUNDANT?

If you undertook a policy which includes unemployment cover and this cover is not required, if this was mentioned at the commencement of the policy or was not mentioned at all, then a claim can be made.

PREVIOUS MEDICAL PROBLEMS.

The majority of policies will have restrictions for previous medical conditions, which means that it’s possible that you could not be covered  under the policy if these details were not disclosed at point of sale, however if you were not informed of this or were never asked about your medical history then it may still be possible for a claim to be made.

HAS YOUR PROVIDER BEEN FINED FOR MISS-SELLING?

There are many providers who have already been fined for the miss-selling of cover, and lots more are expected , if the company that you have a PPI policy has already been fined then it’s highly likely you have a case.

SINGLE PREMIUM LOAN POLICIES

Single premium policies occur when the whole cost of the insurance is added as a lump sum at the beginning of the agreement, you repay this over the term of the loan, if however you changed or left the agreement prior to it finishing then you may be entitled to make a claim for a partial refund.

WERE YOU GIVEN FULL DETAILS OF THE INSURANCE?

This area has quite a large scope, if you were told that the insurance was compulsory or were not even informed that PPI was included within the loan, then you have a strong case for a claim as you should have been informed of the full terms and conditions of the insurance, if this information was not disclosed this could make the claim unfair.

Before getting into this, where possible get hold of a copy of your policies term and conditions. If you no longer have them or have miss-placed them contact your lender and ask to obtain a new copy.

HOW TO RECLAIM.

STEP 1 WRITE TO YOUR LENDER.

Be clear in which area of miss-selling you are making  the claim about, and once you are clear of the reasons you should write a letter to the company the policy asking for a refund and stating your reasons why. When doing this there’s no need to inform the lender of how much you think you are entitled to as they should calculate this for you,

If however the seller was acting as an appointed agent for the provider, they may ask you contact the provider instead, initially contact the branch office you visited, any follow ups can be sent to their Head office

STEP 2 IF NOT RESOLVED TELL THEM THAT YOU’LL COMPLAIN TO THE OMBUDSMAN.

Hopefully at this point you’ll have been offered a satisfactory settlement offer , do not be surprised however if these companies dig there heals in and say things like “ you have had the documentation” or “you did sign for it when you took the agreement out” do not give up.

If this occurs then send another letter enclosing a copy of your initial letter stating quite clearly that you are unhappy with the previous correspondent and ask them to look  at the case again. you should also  make it clear that you will proceed to make a formal complaint to the Financial Ombudsman Service  or any other trade association where applicable.

If you have been offered a settlement but feel that it is insufficient then the advice we give would be to write back again stating a figure that you would be happy to accept, if the lender chooses to not to settle for the requested amount then this information can’t be used against you later.

STEP 3 IF ALL ELSE FAILS COMPLAIN TO THE FOS.

If after following the above procedures a satisfactory conclusion can or has not been reached, we can help you make a formal complaint and start proceedings. please contact This e-mail address is being protected from spam bots, you need JavaScript enabled to view it for more information.