Reclaiming PPI payments by Dean Dunham

People are asking if they can still reclaim payment protection insurance (PPI) premiums. The short answer is yes, if the policy was mis-sold to you and your account was still active during the last six years, so a loan taken out ten years ago, repaid in full five years ago is fine. In some cases you can go back further.

Here are the important points to know about PPI claims:

How do I check if I had PPI?

The first thing to do is to look at the paperwork which was sent to you at the time you took out your loan, credit card, mortgage or other type of finance agreement.

The PPI is sometimes included on your repayment statements and might be listed as "payment protection insurance", "loan protection cover", "card protection cover" or something similar.

If you do not have the paperwork or if it is not clear, contact your lender or finance provider and ask whether you have PPI. If they do not have a reference number, but you believe that you have been sold PPI, ask them to provide details for whoever the underwriter was for their PPI products.

You can then contact them directly so you can check whether they have a PPI policy reference number for you.

How do I know I was mis-sold PPI?

PPI may have been mis-sold to you if it turns out that the policy is not appropriate for your needs, for example: 

• You were aged under 18 or over 65 when the PPI was sold to you. The insurance should not be sold to people outside of these age ranges.
• You worked less than 16 hours a week when the PPI was sold to you. PPI policies do not cover part-time workers.
• You were employed on a temporary or contract basis when the PPI was sold to you. PPI policies do not cover temporary or contract workers.
• You were self-employed when the PPI was sold to you. Protection for unemployment is not always applicable with these policies and you should have been advised of the employment stipulations with the policy.
• You had an existing illness when the PPI was sold to you. Policies are probably invalid if you have a pre-existing medical condition, especially if your illness could worsen, leading to a loss of income.
• You were not informed that the PPI policy would not cover conditions such as stress and backache. PPI policies do not usually cover mental health issues i.e. stress or depression, nor common muscular problems.
• You were aware you may become unemployed when the PPI was sold to you. Some PPI policies do not cover a known or possible loss of income and this should have been explained to you.
• You were not told about the cost of the insurance (or not told you were buying it at all).
• You were not asked about any other insurance, similar to PPI, that you may have already been covered by. You may have already been covered by an existing insurance policy.
• You were told that the PPI was necessary for you to get the loan. A loan is not dependent upon having Payment Protection Insurance. It is entirely optional.
• You were not told that the same policy could potentially be bought for cheaper elsewhere. You do not have to obtain the PPI policy from any specific lender and there are many such policies available. You are supposed to be given the option to source the policy (should you require the same) anywhere.
• You applied for a loan online where the box for PPI was automatically ticked. Many application forms for “on-line” loans or credit cards has a tick box to either opt in or out of PPI. In some cases, the tick box was already ticked and the applicant had to opt out of having the insurance by un-ticking the box. After July 2007 this was changed following the FSA (Financial Services Authority) intervention.

A salesperson should have gone through all of the above points to make sure the policy was suitable. However, some companies misled consumers by failing to explain what it was for and who it applied to. Consumers were advised that they needed to pay for such a policy if they wanted the loan or that it would cost them less if the policy was taken out with the loan.

The policies are purely optional and do NOT have to be purchased from the same company providing the loan. In some instances, such policies were added to the loan without the knowledge or consent of the consumer by stating that the policy was “fully protected” without explaining that this actually meant a PPI policy would be added to the loan at a further cost.

For more information visit Dean’s FREE legal and consumer website.