Martin Lewis: PPI payouts reach £20bn – and rising
More than £20bn of PPI has been repaid so far, and I suspect it’ll be £30bn before we’re done.
You might be thinking you’ve heard this before. After all, I first warned about PPI in 2000, and published my first reclaiming guide in 2006.
Yet for years banks saw it as a cash cow, and systematically mis-sold this insurance – as it made them more profit than the loan itself. The banks lied that it was compulsory or would get you a cheaper rate, gave it to people who didn’t need it, couldn’t use it, and even added to some people’s loans after they’d said ‘no’.
They had a duty to ensure it was suitable for you. For example, you were self-employed but got unemployment cover, or you had a past medical condition they didn’t ask about.
See my full mis-selling checklist at www.mse.me/ppi#checklist.
As the average commission for loan PPI was 67per cent and banks almost never mentioned it, this means most people who had PPI are likely due money back.
Lenders will be forced to write to 1.2m people who were previously rejected and may now be owed due to Plevin.
Though ridiculously it has not ordered them to send these letters to everyone whose commission was over 50 per cent, so most will still need to take action.
Check your old loans paperwork: It may have been called PPI or something like “payment insurance” or, “accident or sickness cover”. If you don’t have your paperwork, you can request it from your lender going back up to six years.and Equifax’s via www.callcredit.co.uk .
Use mine at www.mse.me/ppior www.which.co.uk has free help too.
Claims firms don’t have any better success rate than doing it yourself, with one exception. If the bank rejects you, and they feel you were mis-sold, then go to the free www.financial-ombudsman.org.ukwhich can adjudicate independently.
So if you’re rejected (and that happens) and think you were mis-sold, don’t be put off – just continue to the financial ombudsman yourself. Over 50 per cent of people who get rejected by their bank get ruled in favour by the ombudsman – that’s where real justice often lies.