Mis sold PPI arose for a range of reasons. If any of these situations relates to you then you have a good chance of getting PPI compensation (there are more examples of mis sold PPI policies given below).
1. You were pressured into taking out PPI (for example the bank would not give you credit unless you took PPI)
2. It was not made clear to you that PPI was optional.
3. You were advised to take out PPI but it was not suitable
4. PPI was added to a loan or other credit facility without your knowledge
BMD Tip: It was actually quite common for PPI to have been sold to you without your knowledge. You should check your credit card statements and loan agreements both current and ones that you have already paid in full. If PPI was included you should be able to see associated payments on your credit card statements or as a line item in your loan agreement.
Frequently asked questions about mis sold PPI
Can I claim PPI if I used it?
If you have made a claim against your insurance policy (perhaps because you lost your job) and the policy paid out then it is unlikely that you will be successful in claiming that you were mis sold the policy.
On the other hand if you tried to claim on the policy but were told that you were not eligible for any payments it is highly likely that it was mis sold to you and you should certainly make a claim for mis selling.
Can I claim PPI without paperwork?
Yes. You do not have to have the original signed contract to make a claim. You simply need to have the name of the creditor and the original account number. You can start the claims process with just this information.
Can I claim PPI if I have defaulted on my credit agreement?
Yes. Even if you have failed to repay the debt that you owe you are allowed to make a PPI mis selling claim. The fact that you were mis sold the insurance policy is separate to the fact that you subsequently could not repay the debt. However if your account is in arrears or if you are currently using a debt management solution you must understand that any compensation you are awarded could be retained by the bank and used by them to offset against the money you still owe them.
How far back can I claim a PPI refund?
Currently there are no limits to how far back your debts go before PPI claims are blocked. You simply need to have the name of the original creditor and the account number and you can make a claim.
More examples of mis sold PPI policies
1. You were not employed at the time you took the insurance – whether you were unemployed, self-employed or retired. It would then be impossible for you to make a valid insurance claim.
2. When you took the insurance you had a medical problem that could have kept you from working. This would normally mean that the insurance was not suitable for you. If this wasn’t explained, you can claim.
3. If you were sold a ‘single premium’ policy where the whole cost of the premium is paid for up front with money that is also borrowed at the same interest rate as the loan, you should be able to get a refund by cancelling the PPI. If you cancelled or repaid the loan early, but were unable to cancel the PPI, then you can claim for a refund.
4. If you have already been offered a refund but this was only a fraction of the cost you paid, you can claim to get a fair refund. If you were able to cancel the insurance, but the loan was re-issued at less favorable rates, you can also claim money back.
5. If you believe that the entire cost of the PPI was not explained to you, or if the company only quoted the cost of the loan with the PPI attached without highlighting that PPI was included, then you can claim.
6. If you were told the insurance was compulsory it is likely you can claim. Lenders can insist that a borrower has PPI, but any company that signs up to the banking code must not insist you take out the insurance with them.
7. If other important features of the loan were not explained – for example, the terms for cancelling the cover or significant exclusions such as stress and back problems – then you can claim.
8. Most policies have an upper age limit – usually 65 or 70. If you were older than the age limit for your policy when you took the insurance, you can claim.
9. If you already had alternative cover that could insure your repayments – such as income protection or an employer illness or redundancy package – but were not asked about this, you could claim.
10. If you bought PPI to cover a long term loan there is a chance that the insurance will run out before the loan is repaid. Most PPI policies will only run for five years, so if your loan term is longer than this the seller should have explained this limitation. If they did not then you can claim.
11. If you have noticed you are paying for PPI that you didn’t know you had there is a chance that it was added without your knowledge, or through an ‘opt out’ box that you missed. It will be up to the seller to prove you agreed to the insurance, so if you can’t remember being asked, you can claim.