Analysis by the Financial Services Compensation Scheme indicates that most of the people who apply for payment protection insurance (PPI) refunds use PPI claim companies. The Financial Services Compensation Scheme is a UK fund which offers UK consumers a last resort opportunity to address financial claims against authorized business organisations that have discontinued operations or are in default of regulated trading practices.
Many of the organisations that mis-sold PPI were the trusted banks and loan providers used on a daily basis by consumers in the UK. These institutions received huge pay-outs from insurance providers for selling the products, so had lots of incentives to get consumers to sign up for PPI.
Any PPI now held by UK consumers is now classified as mis-sold, so the consumer will almost certainly be due compensation. Even if a previous claim was rejected, it’s important to put in another as the deadline for claims is 29th August 2019.
Affected consumers will have been sold PPI for a number of financial products, including loans, store cards, credit, catalogue accounts, car finance and overdraft facilities. So, it’s important to check out these agreements to find out just how much you’ve been paying for PPI over the years. You can still find out whether PPI was in place even if you don’t hold the agreements for these products any longer.
Our useful guide offers a number of tips on common mistakes you need to avoid when you do claim back PPI.
Mistakes to avoid when claiming back PPI
We’re highlighting common mistakes consumers make when claiming back PPI below. However, the first common mistake has to be NOT CLAIMING. The Plevin Ruling on PPI that has been in place since 2014 now means just about everyone that ever signed up for PPI was mis-sold the product, due to the high commissions paid to banks and agencies at the time the insurances were taken out. Basically, any consumer who paid over 50% in commission charges on PPI taken out prior to 2007 is entitled to compensation of some kind. You can find out more about this on the website of the Financial Conduct Authority. So, if you make the mistake of thinking you’re not entitled to any PPI compensation, you could be doing yourself out of a tidy cashback.
Other common PPI claim mistakes are noted below:
1. Giving up on making a PPI claim is a common mistake made by people who think they won’t be entitled to any compensation as they no longer hold the paperwork related to their PPI. There are lots of free online checkers which can be used to find out whether PPI was sold, or you can get in touch with the Financial Ombudsman online for a free check.
Around three-quarters of PPI claims are managed by PPI claims companies. Some of the common mistakes people make when dealing with PPI managers are:
1. Being unaware of all likely charges before signing up to any deal. Ensuring there is no likelihood of paying in the event of unsuccessful claims, is the most critical aspect. So, you should ideally find a PPI claim company that works on a no-win, no-fee basis.
2. Fees commonly charged by PPI claim management companies vary greatly. You should find a provider who charges around 25% of any refund, plus VAT.
3. Before putting in any PPI claim use a free online claims calculator, so you have a good idea of just how much compensation you’re likely to achieve.
4. It’s vital to check that your PPI claim company is licensed. You can ask this question directly before signing any agreement and can then verify the information provided on the website of the Ministry of Justice.
5. Using a PPI claims company that doesn’t employ qualified claims handling staff. You should check the expertise of your claim’s handler, as well as the credentials held. This way you can have more confidence in the service provided.