Calculating Your PPI Claims

PPI compensation began in earnest in 2011 after many reviews and judicial cases. This is the year that will potentially see PPI claims end for policies mis-sold before 2017. But you don’t have long – midnight on Thursday 29^th August 2019 is closer than you think. But how do you know that the money you get back is the right amount?

Customers who have received their settlement payments after asking for their premiums back, plus interest at a rate of 8% and since the Plevin case a few years ago, you could get an additional sum in the shape of commission you paid (but didn’t know about it).

More money in the pot

The announcement that the Lloyds banking group had set aside yet more money to fund PPI compensation claims, has left many people wondering if they have a claim and, how much could they be entitled to claim back?

The actual figure will depend on

• the amount you borrowed
• on which product it was
• and how long you have the account for.

For example, some customers have claimed back £20,000 or more because they had two or more credit card accounts. The way the premium was calculated on credit cards was calculating a percentage of the monthly balance.

And the cost of my PPI was...?

The premium paid for PPI varied greatly, anything between 16 and 25% of the amount of the debt (Which? Ltd figures 2011).

PPI premiums were normally charged on a monthly basis but with some products from some banks, PPI was charged ‘up front’ which was known as a single premium policy. The sale of PPI via this means was stopped shortly after the PPI scandal came to light.

It was seen by many lenders as another ‘debt’ on which to charge interest, usually at the same interest rate as applied to the main debt or product.

Credit cards PPI premiums were calculated differently. When you first opened your credit card account the balance was £0 – and the provider had no way knowing if you would use the credit facility.

But, as soon as you used it and didn’t pay the balance off within the month, you would be charged a PPI premium as a percentage of the amount outstanding. When the debt grows, the PPI premium grew with it making it a very expensive insurance policy.

Claiming back PPI AND interest

Reclaiming PPI is not just about getting back the premiums you’ve paid – it is also about getting back the interest you have paid too and commission if this was more than 50% of the cost of the loan but you weren’t told about it.

On credit cards this can be significant but just look at the following calculation:

The cost of PPI on an average credit card in the UK charging 19.32% on an average balance of £5,000 per month would cost an extra £3,219.88 in premiums and interest.

The time has come to call Payment Protection Scotland and take advantage of their no win, no fee service.

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