Mis-sold PPI

 August 2017

Fact sheet no. 506 EW Mis-sold PPI

This fact sheet tells you how to complain about mis-sold payment protection insurance (PPI) and where you can find help to do this.

Use this fact sheet to:

  • understand when you can complain;
  • consider what you may want to complain about; and
  • find out when and how to complain to the Financial Ombudsman Service (FOS).

PPI issues

PPI is a type of insurance. It is designed to cover the payments on a credit agreement (such as a loan, car finance, credit card, store card and mortgage) in certain circumstances. Your PPI policy will say when this might be. For example, a policy may pay out if you are made redundant or are unable to work due to illness.

Warning:

fee-charging companies

Be careful of companies who offer to help you make a complaint about your PPI if you pay them a fee.

If you use a fee-charging company, you are unlikely to get the full amount of compensation because of the fee. You may also owe them money even if your claim is unsuccessful.

Before you agree to let a fee-charging company act for you, think about making the complaint yourself. You can do this for free.

There have been problems with how PPI was sold in the past. If you think that you were mis-sold PPI when you took out a credit agreement, you can complain. You may be able to claim back the money you paid for your policy.

There are several reasons why you may want to complain about your PPI policy.

  • You may think that you were mis-sold the policy. For example, you may have been pressured into buying the policy, or told that you would get a better rate if you bought the PPI.
  • You may have made a claim on the policy and been turned down by the insurance company.
  • You may have requested a refund of the money you paid into your policy (the premium) but have not received it.
  • Your provider earned a large amount of commission from the PPI policy and this was not explained to you. See the section headed Plevin for more information about this issue.

Plevin

In Plevin v Paragon Personal Finance Limited (Plevin) the Supreme Court decided that a customer was treated unfairly because she wasn’t told about the large amount of commission that had been taken from her PPI payment.

From 29 August 2017, the Financial Conduct Authority (FCA) introduced a new reason to make a complaint about PPI based on the Plevin case. This applies to PPI policies that cover repayments on credit agreements where:

  • you took out the agreement before 6 April 2007, but it was still open on or after 6 April 2008 or
  • you took out the agreement on or after 6 April 2007.

If more than 50% of the cost of your PPI was paid as commission and you were not told about this, you can raise a complaint. Any commission paid above the 50% figure should be refunded to you.

  • You can make a complaint about high levels of commission even if you have had a previous mis-selling claim rejected.
  • Banks and providers should write to anyone who has previously had a mis-selling claim rejected to tell them about Plevin.
  • If you made a complaint based on Plevin before 29 August 2017, your lender was allowed to put the case on hold until the new rules took effect. Contact your lender for an update on your case.
  • You are unable to make a complaint based on Plevin if you have already received compensation for the mis-selling of PPI on the same agreement.

Complaints deadline

The FCA has set a deadline for most PPI complaints. You will need to make a complaint to your provider by 29 August 2019. If you do not, you will lose the right to have your complaint looked at.

You may also run out of time sooner. This will depend on:

  • when the event happened that you are complaining about;
  • when you became aware that you might have grounds to complain; and
  • whether you have already made a complaint.

Contact us for advice.

How to complain

Making a complaint about PPI is often a two-stage process.

  • First, make your complaint in writing to whichever company sold you the insurance. Provide details of why you are complaining and ask for a copy of their PPI complaints procedure.
  • See the section Where to get help for more details and sample letters.
  • If you go to the company’s website and put ‘PPI’ into the ‘search box’ you will usually be directed to a page about how to make a complaint. This will also give you contact details. The Financial Ombudsman Service (FOS) also provides links to the PPI complaints section of many banks' websites.
  • Extra advice:

    fee charger

    If you want to make a complaint about a fee- charging company who dealt with your PPI case, see our Claims management companies fact sheet. The Legal Ombudsman deals with these cases, not the FOS.

    Extra advice:

    the PPI provider no longer exists

    You may be able to make a claim to the Financial Services Compensation Scheme (FSCS) even if the company that sold you the PPI is no longer in business. Contact us for advice.

  • Alternatively, you can use Resolver to create and submit your complaint. See the section Where to get help for more details.
  • Once the company has received your complaint, they normally have eight weeks to consider it and reply to you. They should explain if they need more time to investigate your claim.
  • If you are not satisfied with the company’s response, or if they have not replied within eight weeks, you can make a further complaint to the FOS. You will need to complete a complaint form and PPI consumer questionnaire. The FOS is a free service and can independently assess your case.
  • You must refer a complaint to the FOS within six months of receiving the company's final decision. If you do not, the FOS may not be able to look at your case.

Where to get help

Financial Conduct Authority (FCA)

The FCA website has a range of information on PPI, including: 

  • how to claim back money on the sale of PPI;
  • a list of reasons why you may think that you were mis-sold PPI; and
  • a sample complaint form.

Their leaflet, PPI complaints end 29 August 2019: What will you decide? also has information to help you decide whether to make a complaint.

Financial Ombudsman Service (FOS)

The FOS has a consumer fact sheet about common issues which people have with PPI. This might help you to decide on what grounds you can make your complaint.

They also have a range of case studies which show how the FOS looks at PPI complaint cases.

MoneySavingExpert.com

This website has a step-by-step guide and template letters you can use to reclaim mis-sold PPI. It also has information about the Plevin case and shows you how you can make a complaint to the FOS.

Resolver

You can make a complaint about PPI using Resolver. It provides an online tool that has sample complaints emails and a useful PPI guide. Resolver also creates a personal case file that:

Extra advice:

will you have to pay tax?

If you receive a payment as compensation for a mis-sold PPI policy, check whether you will have to pay any tax on the money. Generally, no tax is due on the repayment part of compensation, but the additional interest is taxable. For more information, go to www.hmrc.gov.uk and search for ‘PPI’ or contact us for advice.

  • allows you to email your complaint directly to the company who sold the insurance;
  • allows you to save and upload emails and documents about your case;
  • lets you know when you have received a reply to your complaint; and
  • reminds you when it is time to escalate the complaint further.

Useful contacts

Financial Conduct Authority (FCA)
25 The North Colonade
London
E14 5HS
Phone: 0800 101 8800 for the PPI helpline
www.fca.org.uk

Financial Ombudsman Service (FOS)
Exchange Tower
London
E14 9SR
Phone: 0800 023 4567 or 0300 123 9123
www.financial-ombudsman.org.uk

Financial Services Compensation Scheme (FSCS)
PO Box 300
Mitcheldean
GL17 1DY
Phone: 0800 678 1100 or 020 7741 4100
www.fscs.org.uk

H M Revenue and Customs (HMRC)
Phone: 0300 200 3300 (Income tax: general enquiries)
www.hmrc.gov.uk

MoneySavingExpert.com
www.moneysavingexpert.com

Resolver
www.resolver.co.uk