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150,000 rejected PPI claims to be reviewed

Are you affected by the announcement from the FCA?

What do the updated FCA guidelines mean?

The Financial Conduct Authority (FCA) has announced that up to 150,000 rejected PPI claims could be reviewed under their new guidelines.

After investigation, the FCA recently updated its guidelines on Payment Protection Insurance (PPI). The new guidance will help firms identify when a customer who purchased PPI is owed compensation. It also means that some previously rejected customers may be eligible to resubmit their claim.

What’s payment protection insurance (PPI)?

In the event that you have a change of circumstances, such as job loss or illness, having PPI means that your loan or credit card repayments are covered for a year.

What’s changed about claiming PPI?

After a 2017 ruling, if more than 50% of your PPI's cost was made up by commission for the lender, and no one explained this to you at the time, then you’re due back the extra money above the 50% threshold, so long as your PPI was active at some point since 2008.In the press, this development has been called the ‘Plevin’ ruling.

Much of the updated guidance from the FCA focuses on what was explained to the customer when it was sold. Specifically, firms are being asked to take a closer look at how and when commission was discussed.

 

Could I have been mis-sold PPI?

If any of the following apply to you, then there’s a chance that you were mis-sold PPI:

  • When you took out the credit, there was pressure to sign up to PPI or you were told you had to have it
  • You were promised a cheaper rate on the credit if you bought PPI
  • You were told that if you bought PPI, it increased the chances of your credit application being accepted
  • It wasn’t explained to you that the PPI would end before you paid your loan or credit card off
  • PPI was added to your credit product without your knowledge or consent
  • It wasn’t made clear that if the PPI was added to your loan, you’d have to pay interest on it
  • You were recommended a PPI product that you didn’t need
  • You were self-employed, unemployed or retired when you applied for the credit. These conditions would’ve made you ineligible for PPI
  • You had a pre-existing medical condition when you bought the PPI. This could’ve affected your ability to make an insurance claim

My PPI compensation claim was rejected – should I try again?

The FCA’s updated guidance means that if you’re eligible to make another claim, your lender will contact you. They’ll send you a letter in the post that confirms this, along with instructions on what to do next.

The FCA expects that up to 150,000 people will be affected by this update. When you make your reclaim, all you need to do is mention that you’ve received a letter telling you that you should reclaim for PPI compensation based on new FCA guidelines.

Please don’t make a PPI claim based on the letter if you haven’t actually received one. Your lender will have details of your rejected claim and will contact you if you’re eligible to claim again.

Do I need to pay a firm to reclaim PPI for me?

No. Visit our MoneyAware blog to find out how to claim mis-sold PPI for free.

The deadline for all PPI claims is 29 August 2019

Could a PPI refund affect my debt solution?

What you should do with any money that’s refunded to you from a PPI reclaim will depend on your debt solution.

If you’re on a debt management plan (DMP) you should consider paying this money into your plan in order to pay your debts off sooner.

If you have an individual voluntary arrangement (IVA), you must let your insolvency practitioner know that you’ve received this refund so that the terms of your IVA can be reviewed. The same applies if you have a protected trust deed.

If you have a debt relief order (DRO), you should wait until this has ended before attempting to reclaim PPI. If you receive a lump sum of money during your DRO, it could cause it to be revoked.

If you’ve declared bankruptcy (including a MAP Bankruptcy), you shouldn’t attempt to reclaim any PPI. When you go bankrupt, your right to reclaim PPI transfers to your trustee. Any refund you did receive would need to be paid to them, even after your bankruptcy ends.

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