What is PPI – and did I have it?

What is PPI?

PPI - which stands for payment protection insurance - was sold with loans, credit cards, mortgages and other types of credit too, like car finance or catalogue accounts. Some “stand alone” PPI policies were also sold - that weren’t linked to particular credit.

If you had PPI and then couldn’t work - for example, because you were ill or made redundant - then you could have made a claim. Depending on what your policy covered, some or all of your credit repayments would be made for a time.

PPI was paid for in different ways, depending on what it was sold with.

On some loans, the whole cost of the PPI premium was added upfront to the amount borrowed. The borrower would then pay it off over the term of the loan, paying interest on the premium - just like on the rest of the loan. This type of “single premium” PPI policy was banned in 2009 - it wasn’t supposed to be sold after that.

On other loans - including mortgages - borrowers mostly paid for the PPI by a monthly premium.

PPI policies sold with credit cards were paid for by monthly premiums too - but these were added to what was owed on the card at the end of the month. The cost of the premium was a certain percentage of the total balance owed for that month. And if a claim was paid out, the monthly benefit was often somewhere between three and ten percent of what was owed.

How was PPI mis-sold?

Not all PPI was mis-sold. But, based on our experience, you might have been mis-sold PPI if:

• you didn’t agree to take out PPI, but it was sold to you anyway
• it wasn’t made clear to you that you were taking out PPI - and you didn’t actually want it
• you were told that it if you didn’t take out PPI, you wouldn’t get your credit card, loan or other credit - or you felt pressured into taking it out
• your PPI wasn’t properly explained, or you were advised to take out a policy that wasn’t suitable for you - and if things had been done properly, you wouldn’t have taken out the PPI.

Also, the amount of commission included in the cost of PPI might have been unfair in some circumstances. There was a court case about this known as Plevin. In August 2017, the FCA - the financial services regulator - brought in new rules and guidance for businesses to follow when looking at PPI complaints.

You can find out more about this here.

How do I know if I had PPI?

• PPI was most often sold with:
• credit cards
• store cards
• mortgages
• personal loans and secured loans
• point of sale loans (for example. for furniture or appliances)
• flexible loans business loans overdrafts hire-purchase agreements (for example, on a car)
• catalogue shopping accounts

So if you’ve had any of these products in the past, it’s possible you had PPI. If you’ve still got your credit agreements or statements, PPI might be mentioned on them. Some businesses call their PPI something different - for example: credit card repayments cover credit repayment protector mortgage repayments protector mortgage care creditcare loanguard payment protection cover creditguard If you’re still not sure if you had PPI, contact the business you think is responsible. If a business has already told you that you didn’t have PPI - but you’re not sure they’re right - here are some questions to help you work out if you have a PPI complaint we can help with. If you’re still not sure, phone us on 0800 121 6222.

How will you decide if I’ve been mis-sold PPI?

We’ll look at your individual circumstances - and decide, based on all the information we have, if the business acted unfairly when they sold your PPI.

The things we’ll usually look into include:

• whether you could have made a claim on the PPI policy you had
• whether the business made it clear that the PPI was optional
• whether any important limits to what the PPI policy covered were explained
• whether the PPI policy’s costs and benefits were made clear to you
• if you were advised to take out the PPI, whether that advice was right for you

And the information we look at might include:

• paperwork from the time the policy was taken out
• what you and the business say about what happened
• recordings of any relevant phone conversations
• the business’s sales scripts and training materials

You can read detailed information about how we look into and resolve complaints about PPI - with case studies that show how we put our approach into practice.

You can also read more here about how we expect businesses to refund people whose PPI policy was mis-sold.