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Archive for tag: PPI FAQs

PPI Questions…

This PPI mis-selling saga seems to have gone on forever now. Is there an end in sight?

The payment protection insurance (PPI) mis-selling and subsequent compensation sage has been rumbling on for many years now, since around 2009 when the need for compensation was first introduced by the law courts.

In those early days, many people - including the banks and regulatory authorities - thought it would be a short case for compensating wronged customers. But the scale of the problem was far bigger than anyone thought.

How big is the PPI saga?

The London 2012 Olympics cost less to stage than the amount that has been currently paid back to customers, in total. The Olympics cost in the region of £8million and the PPI saga thus far, has paid back an estimated £12million in compensation.

Although the numbers of people claiming compensation is beginning to slow, the bill is still rising.

Why are so many cases ending up with the Financial Ombudsman Service (FOS)?

FOS is the body who decides the final outcome in disputes involving the consumer and the banks. In some instances, banks, in order to protect their profits, have not been paying back the right amount of compensation and, in some cases, have been denying perfectly eligible claims for PPI compensation. The customer can once again complain to the bank, but if their answer remains no, then the consumer is perfectly entitled to take their case to the FOS.

What does the FOS do when they get a case?

They look deeply in to the case, from listening to voice recordings and examining paperwork, as well as the circumstances in which customers were sold the policy. Currently dealing with a huge case load of PPI complaints, they are taking around 12 months to process individual cases. And, in most cases, they are finding in favour of the customer.

And so people are getting their money back…?

Yes they are but it would be dangerous to assume that claiming back PPI compensation is 'easy' and that FOS will automatically find in your favour.

They will take into consideration what the bank is saying, and what you say. Even though PPI was a poor product sold at a high price to customers, there were some customer who did opt for PPI, with the terms, conditions and exclusion explained to them.

This of course, was fairly rare but if you were legitimately sold the product you will not get compensation.

How long does it take to claim PPI compensation from my bank?

It can take weeks or it can take months to get a successful resolution to your claim. Why not let Payment Protection Scotland handle your case?

PPI Questions - Part 1

There are so many questions about PPI that we have split some these questions over 2 parts; in this first part, we look at the basics of PPI.

1.  What is PPI?

PPI stands for payment protection insurance and is a generic name for insurance policies that promise to pay your repayments should you be unable to make them due to illness, redundancy, unemployment etc. Different banks, building societies and lenders called their own brands of PPI by different names so you it may not always be immediately obvious on any paperwork.

2.  How do I check for PPI?

This is relatively simple but don't forget, you might not see PPI boldly written on paperwork and bank statements - banks and building societies knew that they were sailing close to the wind when it came to some of the selling practices associated with PPI and so you may find it buried or hidden within the small print.

**Check paperwork and statements for anything such as payment protection insurance or loan protection cover, card protection cover **

3.  How do I prove I was mis-sold PPI?

Here at Payment Protection Scotland, we can help you with this but here is a guide to some of the most common mis-selling reasons… 

  • You were under 18 or over 65 when the PPI was sold to you - the insurance does cover people outside of these age ranges
  • You worked less than 16 hours a week when the PPI was sold to you - it does not cover part-time workers
  • You were employed on a temporary or contract basis when the PPI was sold to you - again PPI policies do not cover temporary or contract workers
  • You were self-employed when the PPI was sold to you
  • You had an existing illness when the PPI was sold to you - in most likelihood, you would not have been covered
  • You were not informed that the PPI policy would not cover conditions such as stress and backache; neither did many of these policies cover mental health illnesses
  • You were not told about the cost of the insurance or, as happened in many cases, you were not told you were buying it at all!
  • You were told that the PPI was necessary for you to get the loan - it is entirely optional!
  • You applied for a loan online where the box for PPI was automatically ticked (this is no longer allowed after a change in rules from 2007 onwards)

Read Part 2 for yet more information on how to claim PPI!

PPI Questions: Part 2

In Part 1, we answered some question relating to claiming back PPI compensation from your bank, lender or building society. Here we look at some more questions and how the answers might affect your claim for PPI compensation.

1.  How far back can I claim PPI compensation?

This always creates a little confusion as there is a 6 year deadline but, this relates to 6 years of 'live activity' on your account; for example, you may have had the same credit card since 1992 but providing you have used it and made payments on it within the last 6 years you can claim. Unfortunately, a personal loan that you finished paying at the start of 2005 will not be an account you can claim on.

2.  Is this a special PPI deadline?

No, this is laid down in consumer law relating to financial products.

3.  Where does the 3 year deadline come in?

Banks, building societies and lenders were told to write to customers to inform them that they may have a claim for PPI compensation. Again, following consumer law, now that the bank has told you that their product may be 'faulty', effectively sold to your in error you have 3 years from the date of the letter to make a claim.

It is imperative that if you have received such a letter from your bank, you MUST check your accounts for any PPI policies! Leave it too late and you could miss out.

4.  But, if I owe my lender nothing, can I still claim?

Providing you have made your final repayment within the last 6 years, then yes you can. However, some commentators suggest that a successful outcome if far less likely but Payment Protection Scotland will work just as hard on your behalf; if you are owed PPI compensation then we wholeheartedly believe in getting your back for YOU!

5.  Will claiming PPI compensation affect my credit rating?

No, claiming back PPI has nothing to do with your credit rating and neither will it adversely affect your credit score.

6.  Will making a claim for PPI cancel the policy?

Yes it will and if you are still paying for PPI on your accounts, we strongly advise you stop paying for it, although you should still carry on paying the loan or credit card repayment amount each month.

Have you more questions about claiming back PPI? WE can answer them - call us or use our online contact form.