How Do I Make a Payment Protection Insurance Claim?

The banks went to war and they lost. The High Court has ruled that the new regulations governing how to sell Payment Protection Insurance should be retrospective and as a result, people who were mis-sold these policies are owed compensation. So if you think you could have a Payment Protection Insurance claim, what are the steps you should take?

1. Determine if the policy was mis-sold. Although many PPI policies were mis-sold, not all of them were. It is a viable financial product that may have worked for you. However, if you were pressured into taking PPI, or if it was added into your loan without your knowledge, then you should make a claim. If you were not suitable for the product - for example, if you were already prohibited from claiming because you were self-employed or had a medical condition - then you should also investigate making a claim.

2. How old is the policy? There is a time limit for making claims for compensation. You must make your complaint within six years of being mis sold Payment Protection insurance, or within three years of becoming aware that you might have grounds for complaint. This helps a lot of people who were sold claims before 2006 but only became aware of the mis-selling scandal when it broke in mainstream media last year.

Even if your policy has since expired, since the ruling is retrospective you may still be able to make a claim.

3. Decide if you want to make the claim on your own behalf, or engage an expert to handle the process for you. If you are organised, detail-oriented and have the time to spend making the claim, then you can make the claim yourself. However, hiring an expert with experience can make it faster and easier for you.

Most experts will claim a small fee if they are successful in getting compensation for you. Some will ask you to pay a fee upfront, others will ask for a percentage of the amount you receive.

4. Wait for the outcome. Once you put in a claim for compensation, the lender has five days to acknowledge that they have received a claim from you. They then have eight weeks to determine if your claim is valid.

5. Appeal. If you are not happy with the outcome, be it because the claim was rejected, you feel that the amount was incorrect, or the institution has not responded to you in over eight weeks, you can then take your claim to the Financial Ombudsman Services (FOS). Be aware that with the volume of complaints the FOS handles there is a large backlog.