Payment protection Insurance commonly abbreviated as PPI is an insurance policy that should kick in should you be unable to repay your loan or credit for one reason or the other and make the payment for you for a period of one year.
There is absolutely nothing wrong with PPI and it makes a lot of economic sense to protect yourself this way. However, the manner in which PPI was sold in the past was the problem. For starters, it was ridiculously expensive and had a lot of hidden charges. So, if you think you were mis-sold PPI and want to claw back your cash, here are a few guidelines.
First, you need to look through documents for any reference for payments made towards PPI. Documents like bank statements, agreement forms, policy certificate and receipts will show the insurance cost and its duration of activity. These documents will thus help build your case. In case you have misplaced any of them, you should request for copies from your bank. Once you have all the necessary documents, the next step should be to write a letter to the Mortgage Company or Credit Card Company that sold you the payment protection policy. In this letter, you need to explain why you think you were mis-sold the policy and attached all the necessary evidence. While there is no time frame for filling for such claims, you shouldn’t wait for too long. After submitting claim letter, you should get a response or decision from the bank within eight weeks. If this doesn’t happen, it is time to write complaint letter to Financial Ombudsman Service. If you can avoid claims management companies, that will be better. In fact, there is no need of using these companies. This is because PPI claim process is usually straightforward and most claim companies will take quarter of your compensation or even more. Some of these companies also charge upfront fee and end up not doing any work to reclaim the customer’s money.