PPI claims – easier than you think

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Duncan Farmer was surprised to find it is worth investigating if you have been mis-sold PPI.

The long winter nights suddenly got a bit brighter when a cheque for almost £1,800 landed unannounced on the doormat a couple of weeks ago, about three months after I had reluctantly signed up to a PPI claim firm.

For years I had ignored adverts on the Tube and television and almost endless cold calls to my phone. I was convinced that I could never have been a victim – not only am I confirmed sceptic when it comes to most forms of insurance (and payment protection cover had always struck me as one of the most useless) but I couldn’t believe that anyone would have hoodwinked me into buying it.

 

Not only did they mis-sell it to me, but millions of others were caught in the trap, with premiums added to mortgages, bank loans, credit cards, store cards and car loans. So big is the problem that Lloyds, the worst offender, has set aside more than £18 billion to repay its victims. Other mainstream lenders, such as Nationwide, Barclays and what was Abbey National, were also at it.

Many people reading this will also have a viable claim whether they think they do or not. And the payout could be substantial. In my case I had borrowed £10,000 from my bank in 1999 for a deposit on a flat I was buying in east London for £89,000 – those were the days!

I had, unwittingly, paid premiums of just over £800, but because it had been mis-sold I was entitled to compensation interest, which took my payout beyond £2,000, although I did have to pay tax on some of it.

Finding out whether you had PPI is part of the problem and using a claims firm, which took 25 per cent of my payout, helped to trace a loan I had long forgotten about, but I could just as easily have asked my bank whether I had ever had PPI.

The second issue is deciding whether it was mis-sold. The purpose of PPI is to repay a debt if the policyholder is unable to work through redundancy, sickness or accident or if they die. Anyone who has a job with the sort of benefits that would keep paying them in such circumstances or who had other assets that could be liquidated to clear the debt would not need PPI and would therefore have a good claim for mis-selling.

The value of the average successful claim is just under £3,000, but if your claim related to a mortgage, the amount you paid and the amount you could reclaim could well be far more.

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