We¡¯ve all become quite used to the ads encouraging us to ¡°reclaim PPI.¡± You may also have received calls and texts, as well as flyers and letters from claims management companies. However, the window of opportunity in which to check whether or not you¡¯re entitled to anything won¡¯t stay open forever. In fact, if you haven¡¯t yet started the process of making a PPI claim you have less than a month to do so.
What is PPI?
PPI stands for Payment Protection Insurance. If you¡¯ve had any type of credit (such as credit cards, loans or mortgages etc) at any point in the past 30 years then it may have had a PPI policy attached to it, which you would have paid for. The purpose of PPI was to provide some security for the lender. In theory, the policy would have paid out if you were unwell, made redundant or met with an accident and, as a result, were unable to make repayments. The issue with PPI arises from the mis-selling. Often, these policies were sold to consumers without their knowledge ¨C or they may have not even been eligible for the cover that the PPI policy should have provided. The PPI issues are so extensive that even if the policy was sold properly, the 50% commissions many lenders took mean that most people who had PPI will be eligible for compensation. So far, Lloyds Banking Group has been the lender facing the most significant bill. It is predicted to receive around 13,000 complaints a week between now and the PPI deadline on 29th August. Already, Lloyds has paid out more than ¡ê19bn in response to consumer compensation claims.
Is it really worth making a PPI claim?
So far, the amount of compensation paid since January 2011 to people who were mis-sold PPI is ¡ê35.3bn. In April 2019 alone, banks and other financial firms paid out ¡ê334m. The total number of PPI policies thought to have been mis-sold in the UK during the eligible timeframe is more than 64 million ¨C your credit card, loan or mortgage could easily have been among these. As many consumers weren¡¯t even aware that PPI was being added on to their borrowing, for most people, it is certainly worth investigating whether a claim could potentially be made.
If you have yet to make a claim for PPI compensation, your time is running out. The deadline of 29th August is unlikely to be extended and the FCA has made it clear that any claims submitted after this time simply won¡¯t be eligible. So, the clock is already running on the potential for compensation that your PPI claim might have.
Should you use a claims management company?
No. A lot of PPI claims management companies sprang up in the wake of the FCA ruling on PPI mis-selling and they can be very aggressive when it comes to trying to convince consumers that they are the best option for collecting compensation. However, the process of claiming PPI ¨C and even checking whether you¡¯re eligible for compensation ¨C is very simple and you don¡¯t need a claims management company to help you do it. One very good reason to avoid claims management companies is that they charge a fee, which can be a substantial proportion of the compensation that you could be eligible to receive.
Check now to see if you¡¯re eligible for PPI compensation
The relevance of the August 29th deadline is that after this date it won¡¯t be possible to make a claim for PPI mis-selling. No matter how big your claim might be, after that point it won¡¯t be possible to do anything about it. So, it¡¯s crucial that, if you think you might have been sold PPI at any point, that you check now. You can do this in a number of ways:
- Submit a claim using a free online form. These are available in various locations online, including the Which?
- Contact a lender directly via letter. You can download a letter template and then send the letter off directly to the lender you borrowed from.
- Use the lender¡¯s website. As PPI has been an issue that has affected so many people, many lenders have set up dedicated space on their websites to deal with potential PPI claims.
Once you have made a claim for PPI compensation your lender will have eight weeks in order to respond. They may ask for extra information or documents if you have them. As long as you make a claim before the 29th August deadline then the lender that you contact will have to process it.