Can you Claim Compensation for Mis-sold PPI?

Mrs A. approached the local branch of her bank for a loan in 2001.

She was recently widowed and was finding it hard to make ends meet at a difficult time. She had plans to sell her home, move to something smaller and so on. Until her husband’s financial matters were settled and resolved, Mrs A felt that her own finances needed a boost.

She and her husband had banked with the same bank for many years and she felt safe as she went to them that she would receive the best advice in relation to sorting her finances.

As part of the solutions the bank offered, they sorted a personal loan along with various insurances such as critical illness cover and PPI.

However, with the exposure of the mis-sale of PPI, Mrs A decided to make a claim against her bank. The bank initially refused her claim because, they said, she had been advised on why to take out the PPI policy and that she had agreed to it.

There are many red flags in this short appraisal of the situation surrounding the mis-sale of PPI to Mrs A. Some may apply to your claim for PPI compensation:

• Emotional decision

One criticism that was often levelled regarding the sale of PPI was that it was offered to people at a time when they were in a heightened emotional state. For customers like Mrs A., borrowing money was not something she was doing on a whim – it was an essential move on her part to be able to live on a day-to-day basis.

She may have been under the impression that she had to agree to the policy that day, unaware she could have thought about it and had 14 days to cancel.

• Advised sale

The bank say that they fully advised Mrs A. on why PPI and the other insurances she took out were right for her circumstances at the time. However, an advised sale means that she should have clear why this was the case. Mrs A. was unable to recall why PPI was the right policy nor could she recall why she bought the bank’s version of it, when she already had a similar policy that offered better cover.

Since the mis-sale of PPI, customers must receive advice in writing as to why the policy is right for them.

• Terms and conditions

Not all the terms and conditions were explained. For example, Mrs A. worked part time, usually less than 16 hours a week although she did cover for colleagues who were absent or on leave. In essence, Mrs A was not covered by the PPI policy.

Has this happened to you? Do you have a claim for PPI?

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