How to Claim Back Mis-sold Payment Protection Insurance (PPI)
The first step in claiming back mis-sold payment protection insurance (PPI) is always to complain to the firm who sold you the policy. Many people do this via a claims management company who specialise in claiming back mis-sold PPI.
If the firm rejects your complaint, or makes you a compensation offer you are not satisfied with, you can refer the complaint to the Financial Ombudsman Service (FOS). The FOS has experience of investigating hundreds of thousands of PPI complaints, and is an independent body set up by Parliament to rule on complaints involving financial services organisations where the complainant and the organisation cannot reach an agreement. The FOS can only get involved if you have complained to the firm who sold the policy first.
You will need to complete the FOS PPI consumer questionnaire. This is an eleven page form which includes questions about when the PPI was sold, why it was sold, your personal circumstances at the time and why you feel you have grounds for complaint. If you use a claims management company then they can be used a source of reference and provide valuable support in completing the form to ensure that your case is not jeopardized.
The firm must complete the FOS ‘response form’, which includes a section requiring them to explain why they rejected your complaint.
Key considerations for the FOS will be whether:
- you received information at the point of sale that was clear, fair and not misleading, to allow you to make an informed choice about the transaction.
- the firm took adequate steps to ensure that the PPI was suitable for you.
The FOS is not a court. It adjudicates on cases based on the paperwork provided by the complainant and by the product provider, and on each party’s recollections of the sale. Unlike a criminal court, you don’t need to prove beyond reasonable doubt that you were mis-sold a policy, as the FOS will find in your favour if it believes there is a higher than 50% chance that you were disadvantaged through the firm’s actions. Judgements are also made on the facts of the case, not on how well you argue your case, and are based on whether the firm treated you fairly, not on whether the law has been broken.
The FOS is not a consumer champion: it makes balanced decisions as to whether the customer or the firm is in the right, yet it finds in favour of the customer in the vast majority of cases it handles involving high street banks. It upheld 98% of the Lloyds TSB PPI cases it handled in the six months to June 30 2012, while the equivalent figure for Barclays is 93%, for Halifax Bank of Scotland 90% and for NatWest 89%. The uphold rates are much lower for some building societies, but this may be because they are more willing to uphold complaints themselves. Whichever company rejects your complaint though, it is worth going to the FOS.
The FOS does not charge. There is a high probability your claim will be successful, and if it isn’t, it won’t cost you a penny.
Unfortunately so many PPI plans have been mis-sold that the FOS is struggling with its workload, so please be patient if you end up taking your claim to them.