Claiming Back Ppi On Your Mortgage: A Guide

If you took out a mortgage between 1990 and 2010, you may have been mis-sold PPI (Payment Protection Insurance). This insurance was sold alongside loans, credit cards, overdrafts, and mortgages to cover repayments in the event of a loss of income due to accident, sickness, or unemployment. However, many people were sold this insurance without being informed of the nature of the product, and in some cases, customers were not made aware that the insurance was optional or that certain pre-existing conditions excluded them from claiming. As a result, there is a good chance you can claim the PPI amount back if you believe it was mis-sold to you. The first step is to contact your bank or loan company and ask if you were sold PPI. If so, you can use a template letter to send to the bank to initiate the process of claiming compensation.

How do I claim back PPI on my mortgage?

Check if you had PPI on your mortgage

Payment Protection Insurance (PPI) was an insurance policy sold alongside mortgages, credit cards, overdrafts, and loans. It was designed to cover repayments in the event of a loss of income due to sickness, accident, or unemployment. However, PPI was often mis-sold to customers, who were not informed of the nature of the product, and many borrowers had the product without knowing they had it. This means that if you've ever had PPI, you were likely mis-sold it and could receive money back.

If you took out a mortgage between 1990 and 2010, you may have been mis-sold PPI. To check if you had PPI on your mortgage, you can:

• Contact your bank or loan company and ask if you were sold PPI.
• Go through your old mortgage statements and check for any mention of insurance to cover your payments if you lost your job or were unable to work due to sickness or accident.
• Check your credit report, which lists any loans, mortgages, or other debts within the last six years, even if they are now closed.
• Contact your mortgage lender, who may be able to tell you if you had PPI on your mortgage.

If you find that you had PPI on your mortgage, you can then start the process of claiming compensation. You can use free template letters provided by websites such as Which? and MoneySavingExpert, which require minimal information such as your PPI reference number and the name of the bank that sold you the PPI.

How to claim PPI back for free

If you took out any kind of consumer loan, store card, credit card or mortgage between 1990 and 2010, you may have been mis-sold PPI. Payment Protection Insurance (PPI) was an insurance policy sold alongside loans, credit cards, overdrafts and mortgages to cover repayments in the event of loss of income following an accident, sickness or unemployment.

You can claim PPI back for free by following these steps:

Firstly, check if you have or had PPI attached to a mortgage, loan, overdraft or credit card. Go back through your old loan and mortgage statements and check for any mention of an insurance to cover your payments in the event of an accident, sickness or unemployment. If you don't have these statements, check your credit report, which will list any loans, mortgages or other debts within the last six years. You can also call up your lenders to ask if you had PPI.

If you discover that you did have PPI, the next step is to contact your bank or loan company and ask if you were sold PPI. If you were, you can then start the process of claiming compensation. Both Which? and MoneySavingExpert offer free template letters that you can print off, fill in and send off. If your complaint is upheld, the company that sold you the policy should compensate you. You may also be entitled to statutory compensation, which is usually set at an interest rate of 8% of the money refunded.

If you are unhappy with the amount offered, you can use the free Financial Ombudsman Service to challenge your bank's decision.

Common reasons for a successful PPI claim

Payment Protection Insurance (PPI) was an insurance policy sold alongside loans, credit cards, overdrafts, and mortgages. It was designed to cover repayments in the event of loss of income due to sickness, accident, or unemployment. However, PPI was often mis-sold to customers, and there are several common reasons for a successful PPI claim:

• Failure to Disclose Commission: Banks and credit card companies often charged high levels of secret commission on PPI policies, with some retaining over 95% of the insurance premium. This failure to disclose the existence and amount of commission rendered the credit relationship unfair.
• Ineligibility to Claim: PPI was sold to individuals who would never have been eligible to claim, such as those who were retired, self-employed, or unemployed, or those who already had equivalent cover through other means.
• Pre-existing Medical Conditions: Customers with medical problems in the past may have been classified as having pre-existing conditions, which would have prevented any payment under the terms of the policy.
• Misunderstanding of Optionality: Many customers were not made aware that PPI was optional or that it excluded pre-existing medical conditions and the self-employed.
• Cost of Insurance: If the adviser did not make it clear that the insurance cost would be added to the loan or that interest would be charged on it, this could be grounds for a claim.
• Coercion: In some cases, taking out PPI was made a condition of getting a loan, leaving customers with no choice but to purchase it.

Deadlines for submitting a PPI claim

There is no universal deadline for PPI refund applications. The deadline will vary depending on your individual circumstances and the type of product or service you are seeking a refund for. For example, the deadline for making a PPI claim against a loan may differ from the deadline for making a claim against a credit card.

If you have not yet made a claim but intend to, it is important to be aware of any time limitations set by your lender. Most lenders will have their own internal deadlines for submitting PPI refund applications, which could range from several weeks to several months after making initial contact about a potential claim. It is advisable to check with your lender directly or seek professional advice on any applicable deadlines before proceeding with an application.

If you have already made a claim or received a decision from your lender regarding PPI, the deadline for further action is typically six months after receiving the final decision letter. This means that if you are unhappy with the outcome of your claim or believe that your lender has not adequately addressed your complaint, you have six months from the date of the final decision letter to refer your case to the Financial Ombudsman Service (FOS).

In 2017, the Financial Conduct Authority (FCA) announced a cut-off date for making PPI compensation claims of 29 August 2019.

What to do with your PPI claim money

If you have successfully claimed back PPI on your mortgage, congratulations! Now, you may be wondering what to do with the money. Here are some suggestions and important things to consider:

Firstly, it is important to remember that the purpose of Payment Protection Insurance (PPI) is to cover loan repayments in the event of loss of income due to accident, sickness, or unemployment. Therefore, if you currently have outstanding loans or debts, consider using your PPI claim money to pay off these debts. This can help improve your financial stability and reduce the burden of debt repayments.

Secondly, review your current financial situation and goals. Do you have sufficient savings to cover unexpected expenses or a financial emergency? If not, consider setting aside a portion of your PPI claim money as an emergency fund. This can provide a safety net and give you peace of mind.

Another option is to invest the money for the long term. Consider your financial goals, such as retirement planning, saving for a child's education, or purchasing a new home. There are various investment options available, including stocks, bonds, mutual funds, or property. It is recommended to seek professional financial advice to determine the best investment strategy for your specific circumstances and risk tolerance.

Additionally, don't forget to treat yourself! While being financially responsible is important, it's also okay to enjoy the fruits of your labour. Consider setting aside a small portion of your PPI claim money for something fun or indulgent, such as a vacation, a new hobby, or an item you've always wanted.

Lastly, be cautious of claims handling companies or individuals who promise to help you claim back PPI for a fee. As mentioned earlier, there are free resources and templates available to assist you in the PPI claim process. By handling the claim yourself or with the help of a free independent adviser, you can avoid paying unnecessary fees and maximise the amount of money you receive.

Frequently asked questions