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Payback time

Published: Tuesday, 23 October 2007, 5:58PM

Tonight our Money Saving Expert Martin Lewis, reveals what could be the biggest reclaim of all.

There are more than 20 million payment protection insurance policies in the UK in an industry worth £5 billion but many are believed to be sold unfairly and not within the consumer's best interests.

And it’s now payback time.  The regulators have been investigating the mis-selling of this insurance and Martin believes millions may be able to get thousands of pounds back.

In the programme we follow some of the successes and 10 policyholders go to reclaim school.

What is PPI?

It’s an insurance policy sold alongside loans, mortgages, credit cards and store cards and catalogues and is supposed to protect you in case of accident sickness and unemployment. 

Why’s it been mis-sold?

It’s an incredibly profitable product for the banks; and thus they’ve pushed hard to sell people policies.  The regulator, the Financial Services Authority, has already fined a number of companies and is continuing to investigate “inappropriate selling of insurance”.

Insurance is often sold with loans, and is commonly more expensive than the interest cost itself; yet if the cost of the insurance was never explained to you, it’s possible that you have this insurance, costing thousands of pounds without even realising it.

The fact that two regulators, the Financial Services Authority and the Office of Fair Trading have both investigated the PPI market means PPI sellers are under heavy scrutiny, and has opened the door for reclaiming.

How do I know if I've been mis-sold?

For the Tonight Reclaim Class, Martin has split up mis-selling into five main categories; if you fit into any then you need to consider asking for your money back. These are:

• Did your lender tell you the truth? (e.g. did they even tell you PPI was included, did they say it was compulsory when it wasn’t?) 
• Were you self-employed, unemployed, redundant or retired when you got the cover?
• Did you have medical problems before you got the cover?
• Is your provider one of the firms that has already been fined for misselling?
• Were you sold a 'single premium' loan policy? 

For a full explanation of each of these, and exactly what applies read Martin’s full PPI reclaiming guide. (see the link below)

If still not successful, the official independent arbitrator of financial disputes, the Financial Ombudsman Service (FOS) http://www.financial-ombudsman.org.uk/consumer/complaints.htm#5 can help with your complaint.  It’s free and all you need to do is fill out a form, though you must have already have complained directly to the company before you can put a complaint through.

Of the complaints that have needed to go to the FOS so far, two-thirds have been successful.  There is no penalty for losing, the worst thing that can happen is you don’t get paid out.

PPI
Weblinks 
  
ABI Association of British Insurers
www.abi.org.uk
 
BBA British Bankers’ Association
www.bba.org.uk
 
Conkers – PPI specialists
If you feel your claim is complicated and you want someone to handle your claim.  They charge a 25% fee on successful claims.
 www.conkers.co.uk
 
Finance leasing association
The Finance and Leasing Association is the industry body for the asset finance, consumer finance and motor finance sectors.

Guide to PPI
http://www.fla.org.uk/fla/consumerfinance/Guide_to_Payment_Protection_Insurance.riv
 
FSA Financial Services Authority
Responsible for the regulation of UK financial system.
www.fsa.gov.uk
 
Money Saving Expert
www.moneysavingexpert.com

Royal British Legion
http://www.britishlegion.org.uk

Financial Ombudsman
http://www.financial-ombudsman.org.uk/consumer/complaints.htm#5