PPI: how to put in your claim now that the banks have surrendered

      

We explain how to press your claim for PPI mis-selling now that the banks have abandoned their court appeal.

Britain's banks have finally abandoned their attempts to wriggle out of paying compensation to customers who were mis–sold payment protection insurance (PPI).

The British Bankers' Association has announced that it will not be appealing against last month's ruling in the High Court that the City regulator was entitled to impose tougher rules on mis-selling PPI.

The banks had argued that the Financial Services Authority was behaving unfairly because the rules would apply "retrospectively" to sales, and complaints, made before the new regulations came into force.

So if you have a PPI policy, should you immediately put in a claim for mis-selling? While in many cases the answer will be yes, it's a complicated subject. The following Q&A will help you decide what to do.

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Q I have a PPI policy, what should I do now

A While a great many PPI policies will have been mis-sold, not all were. So it's important to check exactly what your policy covered and whether it was appropriate for your circumstances at the time.

There are a number of ways in which people have been mis–sold. According to Lucy Widenka of Which?, if you can answer "no" to any of the following questions you may have been mis–sold and should make a complaint.

(1) If the insurance was optional, was that made clear to you?

(2) Did the adviser tell you about any significant exclusions – for example, the exclusion that says you won't be covered for any pre–existing medical condition?

(3) If you took out a loan or finance agreement, did the adviser make it clear that you would have to pay for the insurance up front in one single payment? If so, did the adviser make it clear that the insurance cost would be added to the loan and you would be paying interest on it? Single–premium PPI insurance normally lasts only for five years. If your loan or finance agreement was for longer than this, did the adviser make it clear that the insurance would run out before you had finished paying for your loan or finance agreement? The adviser should also have told you that you would continue to pay interest on the insurance premium even after the insurance expired.

(4) If you bought PPI after January 14 2005, did the adviser try to persuade you to take it out by saying something like "we strongly recommend that you consider taking out PPI"? If so, the sale counts as "advised" and the provider should have issued a "demands and needs statement" to show why a particular policy had been recommended and why it was suitable. If they didn't, this is grounds for complaint.

Providers are required to review past sales for patterns of likely mis–selling and contact customers that they think are likely to have been affected. However, you probably stand more chance of winning compensation if you don't wait for the provider to contact you – instead, make the first move yourself and put in a complaint.

Q I've already put in a claim for compensation. What happens now?

A If you have made a complaint to whoever sold you the PPI, they have five days to acknowledge receipt, then eight weeks to respond to you about whether they uphold your complaint.

If you are not happy with the outcome, or you do not get a response within eight weeks, you are entitled to take your complaint to the Financial Ombudsman Service (FOS). You have six months to take your complaint to the FOS, a free service headed by Natalie Ceeney, the chief ombudsman (pictured).

Q Is there a time limit for making a claim?

A You must complain to the ombudsman within six years of the event complained about or three years after you first became aware that you might have grounds for complaint, whichever is the longer. So if, for example, you were sold PPI in 2004, you might still be able to take your complaint to the Ombudsman if you only became aware of the possible mis–selling last year.

Q My PPI policy has expired. Can I still claim?

A Yes – the provider still may have broken the rules on mis–selling.

Q I made a successful claim on my PPI policy. Can I still claim for mis–selling?

A Perhaps surprisingly, you can still claim for mis–selling. For example, you may not have been made aware that the insurance was optional.

Q My original claim was with the ombudsman. Will the court judgment make any difference to me?

A The court judgment will not make any difference to the outcome of your complaint. But, as the ombudsman has been inundated with PPI complaints, you may find that yours is delayed.

Miss Widenka pointed out: "It is worth being patient as about three quarters of complaints about PPI that go to the FOS are found in favour of the consumer."

If you are experiencing financial difficulties, it may be possible to ask the FOS to look at your complaint more quickly.

Q Should I use a claims handling company to request compensation on my behalf?

A This is unlikely to be a good idea. You will have to pay a fee, whereas making a claim yourself, even if you have to appeal to the ombudsman, is free.

Q What was the court case about?

A In response to the rising tide of complaints, the Financial Services Authority last year laid down new rules on the selling of PPI and the handling of complaints about it. Crucially, the rules applied to policies sold before the new regulations came into force. The banks, represented by the British Bankers' Association (BBA), said this was unfair and launched a judicial review. Last month, Mr Justice Ouseley rejected this in the High Court.

The rules require providers to talk potential customers through the key features of a policy, rather than just provide them with a document giving the information. They will also have to be able to show that it was made clear to the consumer that the cover was optional