PPI Claims

What is payment protection insurance (PPI)?

Payment Protection Insurance (PPI) is a type of insurance policy designed to help borrowers maintain repayments on loans, credit cards, or other financial commitments if they become unable to work due to illness, accident, or unemployment. PPI was frequently marketed alongside mortgages, personal loans and credit cards in the UK as a safeguard, but many consumers were often unaware of its intricacies or suitability to their circumstances. It rose to significant prominence—and controversy—when millions of policies were found to have been mis-sold by banks and other lenders.

PPI policies are usually added to your debt automatically or sold aggressively to make the monthly instalments seem more manageable. Despite PPI’s potential benefits, its reputation is overshadowed by allegations of widespread mis-selling. In particular, numerous borrowers were told that having PPI was mandatory, or were misled about the coverage provided, resulting in them paying for an insurance product that they did not truly need.

Many individuals only discovered PPI on their statements when consumer watchdogs and regulators in the UK, such as the Financial Conduct Authority (FCA), began to investigate PPI sales practices in detail. These investigations led to thousands of complaints and billions of pounds in compensation paid to customers who had been mis-sold PPI. Understanding PPI and the reasons behind its widespread mis-selling is fundamental, especially if you suspect you might have unknowingly paid for a policy.

To grasp the essence of PPI, it helps to consider the main characteristics and why it was introduced:

• Primary purpose: Protects monthly repayments in certain circumstances, such as job loss or illness.

• Method of payment: Typically added as a premium to your monthly loan or credit card payment.

• Limitations: Many policies have strict exclusions, leaving some policyholders unable to benefit when they needed it most.

Critics argue that PPI policies were often expensive and offered minimal cover compared to other insurance types. Additionally, many policyholders were ineligible for payouts due to age limits, pre-existing medical conditions, or employment status, and only discovered these exclusions upon trying to claim. Over time, banks were directed to contact customers who might have been mis-sold PPI, resulting in large-scale refunds and ongoing reforms in how lenders market insurance products.

Below is a brief table summarising key points about PPI policies:

Understanding the fundamentals of PPI is an essential first step. If you think you may have been affected, it is crucial to review your finance records or statements to determine whether a PPI policy was attached. In the following sections, we delve deeper into how you can identify PPI, the nature of mis-selling practices, and how to initiate a claim if you are eligible for compensation.

How to identify if you had PPI

Recognising whether you ever had PPI can be tricky, especially if your loan or credit card dates back several years. Many consumers either overlooked PPI on their statements or assumed it was required to secure credit. Yet identifying a PPI policy is central to determining whether you might have been mis-sold and are eligible to make a claim.

Often, lenders listed PPI under ambiguous names, such as “payment cover,” “loan protection,” or “credit insurance,” rather than explicitly labelling it as PPI. Therefore, a quick review of your credit agreement might not provide sufficient clarity. Instead, you may have to methodically check old finance documents for any references to a monthly insurance premium.

Below are some ways to figure out if you had PPI:

• Review credit documentation
  Examine older loan agreements, credit card statements, and final settlement letters. Look for keywords like “payment cover,” “loan care,” or “credit protection.”

• Request statements from lenders
  If you no longer have the original paperwork, contact your lender in writing or by phone, requesting historical statements. By law, lenders are required to supply information they hold on file, although older records might be archived.

• Check for single-premium PPI
  Some PPI policies were charged as a lump sum at the beginning of the loan. If the total amount borrowed seems higher than expected, a single-premium PPI policy may have been added.

If you uncover evidence of a PPI policy, make a record of the policy number, premium amounts, and the dates you held it. This data is invaluable if you decide to pursue a claim. Any information showing how (or if) the policy was explained at the point of sale can also prove integral to demonstrating mis-selling.

Should you remain uncertain, you might try submitting a Subject Access Request (SAR) to your lender, which obliges them to provide all personal data they hold about you. This approach can reveal unexpected policies or confirm whether a policy existed. Once you’ve established that you did hold PPI, your next step is to examine whether the policy was mis-sold.

Understanding mis-sold PPI

Mis-selling occurs when a financial product is sold to a consumer in a way that contravenes regulatory guidelines or best practices, often leaving customers disadvantaged. In the context of PPI, vast numbers of policies were mis-sold across the UK, leading to a large-scale compensation programme. Lenders were found to have sold PPI under misleading circumstances, such as implying it was mandatory or failing to disclose crucial terms.

Common mis-selling methods include:

• Lack of informed consent
  Some consumers were not made aware that PPI had been added to their loan or credit agreement.

• Misrepresenting necessity
  Borrowers were led to believe they had to purchase PPI to get credit approval.

• Unsuitable policies
  Policies were sold to those who could never benefit, such as individuals who were self-employed or had pre-existing medical conditions excluded under the terms.

• Inadequate disclosure of costs and exclusions
  Exorbitant premiums or strict clauses were not clearly explained at the point of sale.

Below is a short overview of factors often cited in successful mis-selling claims:

Ultimately, if you discover that you were told PPI was required, or the product was added without proper explanation, these are strong indicators that you may have been mis-sold. The flood of consumer complaints led the Financial Conduct Authority (FCA) to require lenders to compensate those who could demonstrate they never needed or wanted the policy, nor fully understood its implications. In the following sections, we explore eligibility criteria, claim deadlines, and how to lodge a complaint effectively.

Eligibility criteria for making a PPI claim

Before pursuing a PPI claim, it is important to confirm if you meet certain eligibility requirements. Even if you suspect you’ve been mis-sold, not all situations will qualify. Lenders and regulatory bodies assess whether the sale was truly inappropriate and whether you, as the customer, suffered from lack of disclosure or high-pressure tactics.

Below is a non-exhaustive checklist to help determine potential eligibility:

1. Existence of a PPI policy
   You must identify a policy attached to your account, whether it was cancelled or still active when you discovered the issue.

2. Evidence of mis-selling

   • You were not told that PPI was optional.

   • Existing medical conditions or your employment status made you ineligible.

   • You felt pressured or believed it was required.

3. Timing
   The PPI must have been sold by a regulated entity during a period when they were under the oversight of UK regulators.

4. Substantial lack of explanation
   If the costs, terms, or exclusions were not properly explained, you may have a viable claim.

Being retired, unemployed, or in part-time work at the time of the loan could automatically invalidate a PPI claim if the policy wouldn’t cover such scenarios. Similarly, if you already had insurance through your employer for sickness or redundancy, paying for an additional PPI policy could have been unnecessary.

Even if your PPI was sold long ago, you may qualify for a refund. The key factors are proving the policy existed and demonstrating mis-selling. Eligibility does not guarantee success, but it does provide a framework for reviewing your situation and deciding whether you should proceed with a formal claim.

How to check your claim deadline

One important aspect of PPI claims was the official deadline introduced by the FCA, which fell on 29 August 2019. However, certain exceptions and scenarios still allow a claim beyond this date, especially if you only recently discovered you had PPI, or if there were personal circumstances preventing you from filing in time.

Key points to consider regarding deadlines:

• General regulatory deadline
  29 August 2019 was the primary cut-off for most PPI complaints.

• Exceptions
  If your lender or broker has written to you after the deadline, or you became aware of PPI long after 2019, you may still have grounds to proceed. In some rare cases, personal factors like serious illness during the claim window can allow a late submission.

• Limitation Act 1980
  This legislation typically imposes a six-year limit from the time you became aware (or should have become aware) of the issue. If you only recently realised a mis-selling situation, the “clock” might be argued to start later.

Below is a short table illustrating some potential deadline factors:

If you missed the 2019 deadline yet believe you have a valid reason for your tardiness—such as being unaware of the policy—gather evidence that clearly supports these circumstances. Lenders and the Financial Ombudsman Service will want proof before opening a claim outside the established time limits. While a late claim is typically more challenging, it is not always impossible. Your next step is to begin the complaint process clearly and systematically, as outlined in the next section.

The step-by-step process of making a PPI claim

Filing a complaint about a mis-sold PPI policy involves a structured approach. Although each case differs slightly, you can increase your chances of success by methodically following these steps:

Step 1: Compile key details

• Identify the lender, account numbers, and specific terms of your PPI (if known).

• Gather any evidence of mis-selling, such as marketing materials, call transcripts, or letters that mention the policy.

Step 2: Lodge a formal complaint with your lender

• Contact the lender directly, either online, by phone, or through a written letter.

• Explain why you believe you were mis-sold (e.g., the policy was unsuitable for your employment status).

• Keep copies of all correspondence.

Step 3: Submit supporting documents

• Provide statements or records that show how much you paid for PPI.

• Include emails or letters where you questioned the policy or expressed confusion about its necessity.

Step 4: Review the lender’s final response

• If you receive an offer, check the compensation amount carefully to ensure it matches what you paid, plus relevant interest.

• If you are rejected, make note of the reasons given—these can be challenged.

Step 5: Escalate to the Financial Ombudsman Service (FOS)

• If unsatisfied, or if the lender does not respond after eight weeks, approach the FOS for a free independent review.

• Fill in their complaint form and attach all relevant documents.

Staying organised is key. Maintain a chronology of every communication, the dates you submitted queries, and contacts made. This structure not only clarifies your position but helps if you need to escalate. While some claims resolve in a matter of weeks, others require patience, especially if you have incomplete records or extensive back-and-forth with the lender.

Gathering evidence to support your PPI claim

Strong evidence underpins a successful PPI claim. Lenders and adjudicators often rely on documentation to determine whether the policy was indeed mis-sold. Providing thorough, easy-to-understand proof can significantly boost your likelihood of receiving compensation.

Useful evidence includes:

• Original loan or credit agreements
  Confirm whether PPI was included and how it was presented in the contract.

• Periodic statements
  Highlight how much you paid in premiums over time.

• Emails and letters from the lender
  Indicate if you questioned the policy or expressed confusion.

• Employment and medical information
  Show if you were self-employed, unemployed, or had pre-existing conditions that the policy would not cover.

If you no longer have these papers, a Subject Access Request (SAR) can help retrieve lender-held details like records of phone calls or archived statements. When presenting your case, explain succinctly why you believe the policy was unsuitable or misrepresented. The more concise and organised you are, the more straightforward it is for lenders or the Financial Ombudsman Service to understand the basis of your claim and reach a fair conclusion.

Common reasons why PPI claims are rejected

Despite the scale of PPI mis-selling, not all claims succeed. Understanding the typical reasons for rejection makes it easier to plan a robust argument from the start.

1. Insufficient evidence
   If your complaint is minimal or lacks specific details about how the policy was mis-sold, the lender may dismiss it.

2. Policy deemed appropriate
   The lender might argue that the PPI genuinely suited your needs, citing circumstances like full-time employment with no health issues at the time of sale.

3. Missed deadlines
   Claims lodged after the primary 2019 cut-off may automatically be rejected unless you present compelling reasons for lateness.

4. No proof of policy
   In some cases, if the lender cannot trace records or you cannot demonstrate you paid PPI, it may lead to a refusal.

If you are rejected, or offered partial compensation, you can present additional evidence and request another review. Should the lender maintain its position, escalating the complaint to the Financial Ombudsman Service is your next step. Being aware of these pitfalls upfront can help you shore up your application and avoid unnecessary delays.

Appealing a rejected PPI claim

Many consumers appeal a negative verdict by strengthening their case with further data or seeking an impartial review from the Financial Ombudsman Service (FOS). A rejection does not have to be the end of the road.

1. Revisit the rejection letter
   Determine the exact reason given for refusal. It may be that you need to provide more thorough documentation or clarity on how mis-selling took place.

2. Gather new evidence

   • Statements showing you would not have benefited from the policy.

   • Proof of other insurance coverage you already had.

   • Documentation of your employment status or medical condition, if relevant.

3. Resubmit your complaint
   Contact the lender again, referencing the new evidence. Ask for a fresh review, especially if you previously lacked essential documents.

4. Escalate to the FOS
   If the lender stands by its decision, or eight weeks pass with no resolution, you can file a complaint with the FOS. Submitting an FOS complaint requires completion of their form and providing supporting documents. The FOS will then evaluate whether your lender behaved fairly.

Persistence and clarity remain key here. Many second-look claims succeed when the consumer bridges information gaps and addresses the lender’s reasons for rejection. Document each communication and keep track of timelines to ensure you don’t miss further deadlines.

Calculating your PPI compensation

When your claim is upheld, your compensation usually includes a refund of the premiums you paid, plus interest intended to return you to the financial position you would have been in if not for the mis-sold policy.

Components of a typical PPI refund:

1. Premiums paid
   The total amount you spent on the policy, whether monthly or via a single lump sum.

2. Associated interest
   Usually 8% simple interest per year on the money you paid for PPI.

3. Other charges
   In some cases, if paying for PPI caused you to exceed credit limits or incur late fees, these might also be refunded.

Below is a short table illustrating a hypothetical scenario of premium refunds plus interest:

In real claims, the sums and timings can be more complex, especially with single-premium PPI or if you had varying payments over time. Upon receiving the lender’s calculation, examine the breakdown carefully. If you suspect it is inaccurate or incomplete, query the lender for clarification, or contact the Financial Ombudsman Service if discussions stall.

Understanding fees and charges associated with PPI claims

Although reclaiming mis-sold PPI is free if you do it yourself, you might encounter costs if you enlist outside services. Claims management companies (CMCs) and some legal firms can handle the entire process, but they often charge a percentage of any successful payout or a fixed fee.

Common fee structures:

• Claims management company (CMC) fees
  Many CMCs operate on a “no win, no fee” basis but charge a high percentage of the redress—often between 10% and 30% including VAT.

• Solicitor fees
  If you choose a solicitor for a complex case, you may be billed hourly or under a conditional fee arrangement.

• Possible tax deduction
  The 8% statutory interest added to your payout can be taxable, though lenders often deduct basic-rate tax upfront.

Below is a short table explaining typical fee differences when reclaiming PPI:

If you choose to handle your claim directly with the lender, your out-of-pocket cost should be nil, aside from any postage or administrative fees for document requests. Perform a cost-benefit analysis if you consider professional help; if your potential payout is modest, a large chunk could be lost to fees.

Using claims management companies vs claiming independently

When considering a PPI claim, deciding whether to do it yourself or work with a claims management company (CMC) is fundamental. Each approach has advantages and disadvantages, and what’s “best” often depends on your confidence and availability to deal with the process.

Claiming independently

Pros

• No fees: You keep all your compensation.

• Direct control: You communicate personally with the lender and keep track of every step.

• Simplicity: Modern complaint forms are widely available, and the Financial Ombudsman Service is free.

Cons

• Time commitment: Requires compiling evidence and drafting complaint letters yourself.

• Potentially daunting: Some consumers feel unsure about tackling complex or older loan situations.

Using a claims management company

Below is a short table summarising the pros and cons:

Your choice may rest on whether you are comfortable managing your complaint without professional help. If you have spare time and can gather the evidence, it might be best to go solo and retain all compensation. If convenience is paramount or your situation is complex, paying for support could be worthwhile—just ensure you fully understand the fee structure.

What to expect after submitting your claim

Once you have sent your PPI complaint to the lender, you will typically receive a letter acknowledging receipt of your submission. The lender then begins investigating:

• Confirmation: Within a few days up to two weeks, you should get an acknowledgement.

• Review phase: The lender investigates paperwork, possibly contacting you for extra information. They have up to eight weeks under FCA guidelines to respond with a formal decision.

After the review:

• If your claim is upheld, you receive an offer detailing how much you are owed (premiums plus interest).

• If partially accepted or refused, the letter explains the lender’s reasoning. You can either accept, negotiate, appeal, or escalate your complaint to the Financial Ombudsman Service.

Keeping documentation of every contact is wise. Confirm important discussions in writing, note call dates, and save any letters or emails from the lender. An organised paper trail can prove invaluable, especially if you need to argue your case further.

Timeframes involved in a PPI claim

Delays can occur at various stages, so understanding typical timeframes helps you plan and remain patient:

1. Initial acknowledgement
   Usually within a week or two of your complaint submission.

2. Lender investigation
   By regulatory standards, lenders should respond in full within eight weeks, although complex cases might take longer.

3. Financial Ombudsman Service escalation
   If you are unsatisfied or receive no response, you can contact the FOS. They aim to handle complaints as swiftly as possible, but complicated cases can take several months.

Factors such as missing documentation, multiple credit accounts, or high volumes of claims can extend the timeline. Be proactive about following up if you sense unwarranted delay. Once you reach a settlement agreement, expect a few more weeks before you receive the actual payout.

Tax implications on your PPI compensation

Most of your PPI refund—specifically the premiums you initially paid—will not be taxed. However, the 8% simple interest included to compensate you for being deprived of that money is often treated as taxable income in the UK.

• Statutory interest
  This is commonly taxed at the basic rate (20%), and lenders frequently deduct that amount before sending you your compensation.

Should you be a higher-rate taxpayer, you may owe additional tax if the withheld amount was not sufficient. Conversely, if your income is below the threshold or you have unused annual Personal Savings Allowance, you could reclaim some or all of the tax paid, using an R40 form or an online self-assessment return.

Protecting yourself from PPI claim scams

Because PPI reclaiming has been so widely publicised, scammers have tried to exploit consumers. Recognising potential scams protects you from losing personal data or money.

Watch out for:

• Cold calls or unsolicited texts
  Fraudsters may claim you have a guaranteed payout awaiting you if you send a fee or share your bank details.

• Clone firms
  Some emails or letters closely mimic legitimate lenders or claims management providers, aiming to collect your personal information.

• Too-good-to-be-true promises
  No reputable organisation can guarantee success before reviewing specific evidence of mis-selling.

Stay alert if someone pressures you aggressively or requests unusual information. Report any suspicious approaches to the Financial Conduct Authority, Action Fraud, or your local Citizens Advice centre. Protect your personal data and never provide bank account details, National Insurance numbers, or other sensitive information without verifying the identity of the requesting organisation.

Conclusion

Payment Protection Insurance (PPI) mis-selling remains one of the most significant consumer finance scandals in recent UK history. While a major PPI deadline has passed, late discoveries or extenuating circumstances mean many consumers can still look into whether they had PPI—and if that policy was mis-sold.

By understanding PPI’s background, identifying whether you held it, and recognising the various mis-selling tactics used, you are well-positioned to check your eligibility and gather the evidence needed to support your claim. The process itself can be time-consuming, especially if you need to retrieve old documents or contact multiple lenders. Nonetheless, compensation often includes a full refund of all premiums paid, alongside an interest element intended to return you to the financial state you might have enjoyed otherwise.

Large-scale mis-selling has also fostered new risks—particularly scams—and raised questions about fees for claims management services. You can handle most claims free of charge by going directly to your lender, and the Financial Ombudsman Service is similarly cost-free if an appeal is necessary. While certain complex cases prompt some to entrust the job to experts, it’s essential to weigh any potential fees against the likely compensation.

Ultimately, thorough preparation—compiling documents, setting out a clear narrative of why the policy was unsuitable, and being willing to escalate to the Financial Ombudsman if needed—forms the cornerstone of a robust claim. With the right approach and evidence, many have recovered significant sums from financial institutions that once sold them PPI unfairly.

Frequently Asked Questions

Eligibility and Basic Questions

What exactly is Payment Protection Insurance (PPI)?

Payment Protection Insurance (PPI) covers repayments on loans, credit cards, or mortgages if you become unable to work due to illness, accident, or unemployment.

Who was typically sold PPI?

PPI was often sold to people taking out loans, mortgages, credit cards, or finance agreements, usually without full disclosure or proper explanation.

Can I still make a claim for mis-sold PPI after the 2019 deadline?

Most claims had a deadline of 29 August 2019, but exceptions exist if you only recently discovered the mis-selling or had exceptional circumstances.

How can I tell if PPI was added to my loan or credit?

Check your original agreements, statements, or contact your lender to request historical documents confirming PPI presence.

Claim Process

What evidence do I need to support my PPI claim?

You should provide credit agreements, statements showing PPI payments, any related correspondence, and evidence of your employment or medical status if relevant.

How long does a typical PPI claim take?

Most lenders respond within eight weeks, though more complicated cases or escalations to the Financial Ombudsman Service can take months.

What if I don’t have the original loan documents?

You can request documents directly from your lender through a Subject Access Request (SAR), requiring them to send you any personal data they hold.

Can I handle a PPI claim myself, or should I use a claims management company?

You can manage claims yourself at no cost, but some prefer professional help, especially if their case is complex.

Appeals and Rejections

My PPI claim was rejected; can I appeal?

Yes, you can appeal by providing additional evidence, clarifying your claim, or escalating to the Financial Ombudsman Service if unsatisfied with your lender’s response.

What reasons do lenders typically give for rejecting PPI claims?

Common reasons include insufficient evidence, missed deadlines, or the lender claiming the policy was appropriate for your circumstances.

Is the Financial Ombudsman Service impartial?

Yes, it’s an independent body providing free adjudication if you’re unsatisfied with your lender’s final response.

Financial Details and Compensation

How is PPI compensation calculated?

Compensation typically includes the premiums paid, plus 8% annual statutory interest on the total amount.

Will tax be deducted from my PPI refund?

The premium refund itself isn’t taxable, but the statutory interest portion is usually taxed at the basic rate (20%) before you receive it.

How can I reclaim tax deducted from my PPI compensation?

If you’re eligible, reclaim tax by completing form R40 or submitting a self-assessment tax return to HMRC.

How long does it take to receive my compensation after acceptance?

Typically, payments arrive within four to six weeks after accepting the lender’s compensation offer.

Special Circumstances

What if the original lender has ceased trading or merged?

You may claim through the Financial Services Compensation Scheme (FSCS) or approach the company that acquired your lender.

Can I claim PPI on behalf of a deceased relative?

Yes, as an executor or beneficiary, you can pursue claims on behalf of the deceased’s estate.

Can I claim if I had multiple PPI policies?

Yes, each policy should be individually assessed for potential mis-selling.

Protecting Yourself from Fraud

How can I spot a PPI claim scam?

Beware of unsolicited calls or texts promising guaranteed payouts or asking for fees upfront—genuine claims don’t require these.

What should I do if I suspect a PPI scam?

Report any suspected scams to Action Fraud, the Financial Conduct Authority (FCA), or Citizens Advice.

Additional Help and Resources

Where can I get free advice about my PPI claim?

Citizens Advice and the Financial Ombudsman Service both provide free guidance and support throughout the claims process.

Can Citizens Advice help with complex PPI claims?

Yes, Citizens Advice can guide you on making your claim clearer and stronger, and help you escalate issues if necessary.

Still have questions?

If you’re unsure about any aspect of making a Payment Protection Insurance claim—such as verifying eligibility, handling a complex mis-selling situation, or understanding how interest is calculated—you can speak directly with an expert for personalised guidance. This specialised advice can clarify your unique circumstances and help you determine the next steps in pursuing a successful claim.

Glossary

Affordability Check

An assessment conducted by lenders to verify whether borrowers could realistically afford PPI alongside their loan or credit repayments.

Claims Management Company (CMC)

A business that helps consumers manage financial compensation claims, including mis-sold PPI, typically charging fees based on successful outcomes.

Cold Calling

The unsolicited marketing practice often associated with PPI scams, where individuals are contacted unexpectedly via phone to encourage claims.

Commission

A sum paid to sales representatives or banks for selling PPI policies, sometimes contributing to mis-selling due to incentives.

Compensation

Financial reimbursement provided to consumers who have been mis-sold PPI, usually including premiums paid plus statutory interest.

Consumer Credit Act 1974

UK legislation that regulates credit agreements, relevant in cases where PPI was included within these agreements.

Credit Agreement

A formal contract between a borrower and lender outlining loan terms and repayment conditions, often including details of any insurance such as PPI.

Credit Card Protection Insurance

A variant of PPI specifically sold with credit cards, designed to cover payments during periods of financial hardship.

Deadline for Claims

The final date, set by the FCA as 29 August 2019, by which most PPI mis-selling claims had to be submitted, unless exceptions apply.

Exclusions

Specific circumstances under which PPI would not pay out, often poorly communicated to consumers, leading to claims of mis-selling.

Financial Conduct Authority (FCA)

The UK regulatory body responsible for overseeing financial services, including the supervision of PPI complaint handling and related consumer protection.

Financial Ombudsman Service (FOS)

An independent organisation providing impartial adjudication on disputes between consumers and financial service providers regarding PPI and other financial products.

Financial Services Compensation Scheme (FSCS)

A government-backed scheme offering compensation if a financial institution cannot pay claims due to insolvency or closure.

High Court Ruling (Plevin Case)

A landmark decision affecting PPI claims, highlighting the need for transparency on commissions paid, potentially making additional compensation available.

Independent Financial Adviser (IFA)

A professional who provides unbiased financial advice to consumers, relevant in clarifying suitability of products such as PPI.

Insurance Premium

Regular payments made to maintain a PPI policy, usually added to monthly loan repayments or charged as a lump sum.

Loan Protection Insurance

Alternative terminology sometimes used for PPI, indicating a policy designed specifically to safeguard loan repayments.

Mis-selling

Selling a financial product under misleading or inappropriate circumstances, frequently associated with widespread malpractice in PPI sales.

Mortgage Payment Protection Insurance (MPPI)

A type of PPI specifically covering mortgage repayments in the event of unemployment, sickness, or injury.

No Win, No Fee

An arrangement common among claims management companies, where fees are only payable if a compensation claim succeeds.

Ombudsman Decision

The final determination by the Financial Ombudsman Service, binding on financial institutions but optional for consumers to accept.

Optional Insurance

Policies like PPI that were supposed to be voluntary but often misrepresented as mandatory during sales pitches.

Payment Break Plan

Another alternative term for PPI, implying temporary suspension of repayments covered by insurance if specific conditions are met.

Payment Protection Insurance (PPI)

Insurance intended to cover loan or credit repayments if policyholders become unemployed, injured, or seriously ill.

PPI Claim Form

The official document submitted to a lender or claims handler detailing the reasons a consumer believes their PPI was mis-sold.

PPI Compensation Calculator

An online or manual tool used to estimate the amount of compensation due from mis-sold PPI policies, including interest payments.

PPI Policy Number

Unique reference number assigned to each PPI agreement, necessary when submitting a complaint or claim.

Pre-existing Medical Conditions

Medical conditions present before taking out PPI, often leading to invalid claims or disputed coverage if undisclosed or ignored at sale.

Premium Refund

Repayment of premiums initially paid for mis-sold PPI, typically forming part of compensation.

Regulatory Deadline

The formal cut-off established by the FCA (29 August 2019), which limited the time frame to lodge most PPI claims.

Single-Premium PPI

PPI policies sold by charging the full premium upfront, frequently financed as part of the loan amount, causing increased overall borrowing costs.

Statute of Limitations

Legal time limits within which claims can be made; relevant for PPI claims in determining late eligibility after the main deadline.

Statutory Interest

The 8% annual interest rate typically added to PPI compensation, intended to reflect lost financial opportunity.

Subject Access Request (SAR)

A formal request under data protection law allowing consumers to access all personal data held by lenders, useful for locating hidden or forgotten PPI.

Suitability Assessment

A required evaluation to determine whether a financial product like PPI was genuinely appropriate for a consumer’s specific circumstances.

Tax Deduction at Source

Automatic deduction of basic-rate income tax from the interest portion of PPI compensation payments by lenders before consumers receive their refunds.

Total Amount Payable (TAP)

The complete cost of a loan including interest and fees, such as PPI, often obscured to consumers at the point of sale.

Unemployment Cover

An aspect of PPI providing temporary repayments if the policyholder becomes involuntarily unemployed, subject to stringent criteria.

Unfair Terms

Contractual clauses identified by regulators or courts as excessively disadvantageous to consumers, relevant to PPI exclusions and conditions.

Voluntary Cancellation

The consumer's right to terminate a PPI policy voluntarily, with potential entitlement to partial refunds if terms were unclear or mis-sold.

Written Complaint

The formal process of submitting documented dissatisfaction about PPI mis-selling directly to the financial institution involved, initiating the claim procedure.

Useful organisations

Action Fraud

Action Fraud is the UK's national reporting centre for fraud and cybercrime. They handle reports of scams, including PPI-related fraud and misleading claim services, and provide advice on protecting yourself from fraud.

• Phone: 0300 123 2040

• Website: www.actionfraud.police.uk

Citizens Advice

Citizens Advice offers free, confidential, and impartial advice to UK residents on a variety of financial issues, including managing PPI claims, understanding eligibility, and dealing with complaints about financial products.

• Phone: 0800 144 8848 (England), 0800 702 2020 (Wales)

• Website: www.citizensadvice.org.uk

Financial Conduct Authority (FCA)

The FCA is the regulatory authority overseeing financial markets in the UK, ensuring fair treatment of consumers, handling regulation around PPI claims, and providing guidance on your rights regarding financial products.

• Phone: 0800 111 6768

• Website: www.fca.org.uk

Financial Ombudsman Service (FOS)

The FOS is an independent body designed to resolve disputes between consumers and financial businesses. If you’re dissatisfied with your lender’s handling of your PPI complaint, the FOS offers a free and impartial resolution service.

• Phone: 0800 023 4567

• Website: www.financial-ombudsman.org.uk

Financial Services Compensation Scheme (FSCS)

The FSCS provides protection and compensation if a financial institution goes out of business and is unable to pay claims. This can include compensation for valid PPI claims if the original provider no longer exists.

• Phone: 0800 678 1100

• Website: www.fscs.org.uk

MoneySavingExpert

MoneySavingExpert is a consumer finance information service that provides detailed guidance, templates, and advice on managing personal finance, including step-by-step help in reclaiming mis-sold PPI.

• Phone: Not available (online resource only)

• Website: www.moneysavingexpert.com

Which?

Which? is an independent consumer rights organisation providing advice, information, and guidance on financial products, including comprehensive resources on how to identify mis-sold PPI and claim compensation effectively.

• Phone: 029 2267 0000

• Website: www.which.co.uk

All references

Citizens Advice, 2020. Payment Protection Insurance – check if you can complain about mis-sold PPI. https://www.citizensadvice.org.uk/consumer/insurance/problems-with-insurance-policies/payment-protection-insurance/check-if-you-can-complain-about-mis-sold-ppi/

Financial Conduct Authority (FCA), 2019. FCA finalises plans to place a deadline on PPI complaints. https://www.fca.org.uk/news/press-releases/fca-finalise-plans-place-deadline-ppi-complaints

Financial Conduct Authority (FCA), 2019. PPI complaints deadline and handling. https://www.fca.org.uk/consumers/ppi-complaints

Financial Ombudsman Service (FOS), 2022. Complaints we deal with – Payment Protection Insurance (PPI). https://www.financial-ombudsman.org.uk/businesses/complaints-deal/ppi

MoneySavingExpert, 2021. PPI reclaiming: Tools and templates. https://www.moneysavingexpert.com/reclaim/ppi-loan-insurance/

Which?, 2022. Payment Protection Insurance (PPI) explained. https://www.which.co.uk/money/insurance/payment-protection-insurance