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Martin Lewis: Have you made your PPI claim?

PUBLISHED: 13:26 10 March 2017 | UPDATED: 13:26 10 March 2017

Anyone who has had a loan, credit card or store card could be eligible for PPI compensation. Picture: David Jones/PA Wire

Anyone who has had a loan, credit card or store card could be eligible for PPI compensation. Picture: David Jones/PA Wire

The UK’s biggest ever financial scam wasn’t done by dodgy blokes in back alleys, but by bankers in pin stripe.

Now the regulator, the Financial Conduct Authority (FCA), has given in to banks’ demands to put a deadline on reclaiming PPI.

More than £20bn of PPI has been repaid so far, and I suspect it’ll be £30bn before we’re done.

Everyone who has ever had a loan, credit card, store card, mortgage, overdraft or catalogue debt, should take note of these five facts:

1. Now, just having had PPI means most were mis-sold.

2. The deadline’s 2019, but act ASAP to beat the queue.

3. Don’t assume ‘it’s not me’ – even if you said ‘no’ to it.

4. Don’t pay to reclaim. Free tools can do it for you.

5. A typical payout is £3,000 – so it’s worth your time.

Here’s a quick Q&A.

Q. I’ve heard of it, but what exactly is PPI mis-selling?

PPI stands for payment protection insurance, an insurance policy sold to cover a year’s repayments on debts in case of accident, sickness or unemployment, and there’s nothing wrong with that.

Yet for years banks saw it as a cash cow, and systematically mis-sold this insurance.

The banks lied that it was compulsory or would get you a cheaper rate, gave it to people who didn’t need it and even added to some people’s loans after they’d said ‘no’ to it.

Q. When is the deadline?

The FCA has said the last day you’ll be able to put in a claim for PPI mis-selling is August 29 2019. While that sounds a long time away, from this August it’ll spend millions promoting the cut off, so the system is likely to get clogged up, therefore go quickly to avoid being stuck at the back of the queue.

Q. I had PPI but what counts as mis-selling?

Typical examples include; they lied that PPI was compulsory, or it would cut your loan costs, sometimes it was added without asking, or even after you’d said ‘no’. They had a duty to ensure it was suitable for you.

Q. Why are you saying “Now just having had PPI means most were mis-sold?”

The regulator also confirmed that from August 29 this year, a new category of mis-selling called ‘Plevin’ comes into play. It says that if more than 50% of the cost of your PPI went to pay commission to the lender from the insurer, and you weren’t told it, then you’re due the extra back, plus interest.

As the average commission for loan PPI was 67% and banks almost never mentioned it, this means most people who had PPI are due money back.

Q. How do I know if I had PPI?

- Check your old loans paperwork: It may have been called PPI or something like “payment insurance” or “accident or sickness cover”.

If you don’t have your paperwork, you can request it from your lender going back up to six years.

- What if I can’t remember my lender? Your credit report shows all lending active within the last six years.

- What if I haven’t got paperwork? If you haven’t got your paperwork you can ask the lender for it (going back six years). If it refuses you can force it to give it to you under the data protection act.

Q. How do I go about reclaiming, do I need a company?

No. There’s no need to pay a claims firm 30% of your payback to do this. You can do it easily yourself with free tools online or even just calling your bank.

Claims firms don’t have any better success rate than doing it yourself, with one exception. If the bank rejects you, and they feel you were mis-sold, then go to the free www.financial-ombudsman.org.uk which can adjudicate independently.

More than 50% of people who get rejected by their bank get ruled in favour by the Ombudsman – that’s where real justice often lies.

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