How do I reclaim mis-sold PPI for free?


What is PPI?

The purpose of Payment Protection Insurance (PPI) is to cover your loan repayments in certain circumstances, such as being made redundant or being unable to work due to illness.

Why is PPI such big news?

UK banks have been found to have systematically miss-sold PPI over a number of years. In 2011, the British Bankers Association (BBA), the body that represents UK banks, lost a high court judicial review into PPI miss-selling, resulting in the industry setting aside £9bn for future claims.

How do I know if I’ve been mis-sold PPI?

The company that sold you the PPI should have made sure you understood what you were purchasing and that it was appropriate for your circumstances. There are a number of ways in which PPI was mis-sold including:

  • If you didn’t realise you had PPI
  • If you were led to believe that you couldn’t take out the loan without PPI
  • If the lender recommended you take out PPI without issuing a “demands and needs” statement
  • If you weren’t told that pre-existing medical conditions weren’t covered and that you wouldn’t benefit from the policy
  • If you were self-employed, unemployed or retired and wouldn’t benefit from the policy
  • If the lender failed to properly disclose the total cost of the policy or commissions that would be payable

How do I reclaim PPI?

Once it became clear that systematic mis-selling of PPI had taken place, a large number of claims management companies were set up.

A claims management company will typically charge a fee (also known as a commission) to reclaim mis-sold PPI for you; this fee will typically be between 30% and 40% (including VAT) of the value of the compensation you receive. So if, for example, your claim is successful and you receive £1,000 in compensation, £300 to £400 of it will be paid to the claims management company.

However, the process for reclaiming mis-sold PPI is relatively straightforward and doing it yourself means you get to keep 100% of the compensation that is due to you.

Debt Advice Foundation is a supporter of Which? and MoneySavingExpert’s joint campaign to increase awareness of how to reclaim mis-sold PPI yourself. Both Which? & MoneySavingExpert have excellent step by step guides covering everything you could ever need to know on how to reclaim mis-sold PPI.