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FCA: Up to 150k rejected PPI claims will be reviewed
The Financial Conduct Authority (FCA) recently announced that up to 150,000 PPI customers who had their claims rejected may get the chance to make a new complaint.
In the past, firms have sometimes struggled to determine if a customer with payment protection insurance (PPI) is owed compensation. However, updated guidance from the FCA has made the rules clearer, meaning that more customers may be eligible to resubmit their claim.
This announcement was welcomed by MoneySavingExpert.com, as founder Martin Lewis campaigned in 2018 for rejected PPI customers to be given the chance to resubmit their claim for mis-sold PPI.
What is PPI and how does it work?
In the event that you have a change of circumstances, such as job loss or illness, having PPI means that your loan or credit card repayments are covered for a year.
While PPI was created with good intentions for the customer, a history of mis-selling has left it with a fairly negative reputation.
What’s the ‘Plevin Rule’ and how does it affect PPI?
Due to a court ruling in a case known as ‘Plevin’, even just having PPI at some point could mean that you’re owed a refund.
This is the Plevin Rule in a nutshell: If more than 50% of your PPI’s cost went to the lender as commission, and no one explained this to you at the time, then you’re due back the extra money above the 50% threshold (so long as your PPI was active at some point since 2008).
The updated guidance from the FCA is focused very much on what was explained to the customer at the point of sale. Specifically, they’re telling firms to assess how and when the subject of commission was discussed, if at all.
Could I have been mis-sold PPI?
If any of the following apply to you, then there’s a chance that you were mis-sold PPI:
- When you took out your credit product, you were pressured into buying PPI or told you must have it
- You were promised a cheaper rate on your credit product as long as you bought PPI
- You were told your loan or credit application had a better chance of being accepted if you bought PPI
- It wasn’t explained to you that the PPI would end before you paid your loan or credit card off
- PPI was added to your credit product without your knowledge or consent
- It wasn’t made clear that you would pay interest on the PPI if it was added to your loan
- You were recommended a PPI product that wasn’t relevant to your needs
- You were self-employed, unemployed or retired, which would’ve made you ineligible for PPI
- You had a pre-existing medical condition when you bought the PPI, as this could’ve affected your ability to make an insurance claim
I was mis-sold PPI and I want to reclaim – what should I do?
If the FCA’s new ruling means that you’re eligible to make a reclaim, you will soon receive a letter in the post about it.
You can submit a new claim for PPI compensation if:
- You’re one of 10,000 customers who had been told that they couldn’t make a claim based on the commission costs, even if you were told about it at the point of sale
or
- You’re one of approximately 140,000 customers who were previously rejected but haven’t had their claim assessed under the Plevin rules.
When you make your reclaim, all you need to do is mention that you’ve received a letter telling you that you should reclaim for PPI compensation based on new FCA guidelines.
Please don’t make a PPI claim on the basis of the Plevin Rule letter if you haven’t actually received the letter. Your lender will have details of your rejected claim and will contact you if you’re eligible to claim again.
Do I need to pay a firm to reclaim PPI for me?
No. You can make a PPI claim yourself for free, which can save you a fair bit of money if it’s approved.
The deadline for all PPI claims is 29th August 2019. If you’ve never made a PPI claim before and believe you may be eligible, don’t wait around. Get your PPI claim in as soon as possible.
