Reclaiming PPI Refunds Yourself

New PPI Complaints Time Frame Changes

Historically Payment Protection Insurance or PPI complaints should be dealt with in a period of 8 weeks by your bank or lender.

However, because of the massive influx of complaints since the Judicial Review on the 20th April 2011 the FSA has extended the time period in which banks or lenders have to deal with complaints. Now, if you make a complaint after the 20th April 2011 but before 31st August 2011 then the banks or lenders will have up to 16 weeks to deal with your complaint.

Thereafter up until the end of 2011 they will have 12 weeks to deal with your complaint and then from the beginning of 2012 it will revert back to the 8 weeks time period that it was before the judicial review.

Barclays Bank to settle ALL PPI claims made before 20th April 2011

Barclays Bank has announced today (13/06/2011) that it will pay compensation on all Payment Protection Insurance (PPI) which it sold and for which they received a complaint about before 20th April 2011. This means means those customers that made written complaints to Barclays before that date will automatically be entitled to a full refund plus 8% interest.

If you didn't make a complaint to Barclays before 20th April then you will still be assessed on merit but won't be entitled to the automatic refund which still means you will have to explain how and why you were mis-sold PPI, there may be some negotiation involved and ultimately you may still have to escalate your case to the Financial Ombudsman if you do not get a satisfactory response from Barclays.

Despite this being a positive move by Barclays if you have already had your claim refused in the past then you will have to submit a new claim. It would be fantastic if other UK banks and lenders would follow the example set by Barclays instead of dragging their heels.

What is PPI or Payment Protection Insurance?

PPI has been very confusing for consumers, with many not sure what it was or whether they actually have it. PPI is designed to cover loan or credit card debt repayments in the event of unforeseen problems e.g. if someone becomes ill or loses their job. These policies are often sold as part of the credit deal when you take out a loan, mortgage or credit card.

Why are PPI policies and how they were sold suddenly important?

In April 2011, the UK’s banks lost an attempt to prevent new regulations on how they should sell PPI which also covered how they were sold over the last 6 years.

Whilst not all PPI policies were mis-sold some Banks and other lenders sold PPI to their customers without fully explaining what it covered. In some cases the banks and lenders lied to customers telling them that it was a compulsory part of a loan or credit card, or they simply added it without the customer's knowledge or consent.

The British Bankers Association (BBA) announced in May 2011 that it will not be appealing against a High Court ruling that the Financial Services Authority (FSA) sought to impose tougher rules on the past, present and future mis-selling of PPI policies. It is estimated that the banks could be liable for a combined sum of approximately £9 billion in compensation as a result. Obviously this figure depends on how many people come forward with a complaint.

So, if you've had a PPI policy in the last six years and believe it was mis-sold to you then you could very well be entitled to a refund.

How do I know if I have a PPI policy?

Whilst the new rules suggest the banks and lenders will have to contact all past PPI policy customers there is no guarantee they will do so. Therefore the best thing to do if you've had a loan or a credit card in the last six years is to check your agreement to see if there is a PPI policy attached to it. Don't just rely on looking at your statement either as often the PPI payments are front-loaded at the start of the repayments.

If you can't find your original loan or credit card agreement then you can contact your bank or lender and they are legally obliged to send you copies of your agreement, although some may charge you a small admin fee (no more than £10 maximum). Here is a list of banks and lenders contact details for PPI's.

Was I mis-sold PPI and do I have a claim?

The most obvious issue to consider is whether or not you actually needed the Payment Protection Insurance policy at the basic level but there are several reasons why you might be entitled to claim for a refund as follows:

The bank or lender told you that you had to have PPI. For example did they tell you that if you didn't protect the loan or credit card then you wouldn't get it or that you would be more likely to be approved if you took out a PPI policy. Either way if you were coerced or misled into taking out a PPI policy then you have a legitimate claim to a refund.

You never actually knew about the PPI policy being added. It is only now with all of the media coverage that you investigated whether you had a PPI policy attached to your loan, mortgage or credit card. In instances like this the PPI was added to the agreement without the borrower being fully informed and unless you looked through your paperwork in detail at the time then you would not have been aware of it. The onus was on the bank or the lender to inform you at the time and if they didn't then you have a valid claim to a refund.

The PPI policy didn't or doesn't actually cover you properly. If you were or are self-employed, part-time, freelance or retired then it is highly likely that your PPI policy won't cover you. The duration of PPI policies is usually for up to five years. However, if your credit agreement was for a longer period then the PPI was mis-sold. Again, if there was more than one person on the credit agreement and yet the PPI only covered one of you then it was mis-sold.

The PPI policy was too expensive. Some Payment Protection Insurance is so expensive that you would barely cover the cost were you to claim on it and in these instances you were misled and mis-sold the policy.

The PPI was sold to you as part of a debt consolidation package. More often than not if the PPI policy was sold to you as part of a debt consolidation loan then it wouldn't have been suitable and you could be entitled to a refund.