PPI stands for payment protection insurance. It's designed to cover your loan or credit card repayments for a year in the event of an accident, sickness or, in some cases, unemployment. Criminally, PPI was widely mis-sold and now, because of a ruling called Plevin, even just having had it means you're likely due a refund.

The original mis-selling left many paying thousands for potentially worthless cover – and you could even have it without knowing. A major problem was that sales staff were hugely incentivised to sell PPI whenever possible. Many were under so much pressure, they strayed far from the truth. The sellers were often trusted financial institutions, and many borrowers were left with mis-sold PPI. The mis-selling's scale has meant that many have no idea how much they're owed.

In 2014 a court ruling held that customer Susan Plevin had been treated unfairly because she wasn't told about the large amount of commission (71.8%) taken from her PPI payment.

The Plevin rule means if more than 50% of your PPI's cost went as commission to the lender (or the lender and the broker/adviser together), and that wasn't explained to you, you are due back the extra above that. It is for the lender to pay you this and it doesn't matter if you paid for your PPI as one lump sum or monthly.

With loan PPI, on average 67% of what you paid was pocketed by banks as commission from insurers, and banks almost never mentioned it – so millions more people are owed compensation.

Following the Plevin case, new rules on commission came into force on 29 August 2017, so any PPI claims since then should have been automatically checked for Plevin eligibility as well.

If you've previously been rejected, you're likely still due a Plevin payout

Plevin could work for you if you've had a claim rejected from a bank, building society or other big financial institution (even if the ombudsman agreed with the rejection). There were 1.2 million whose claims had been turned down (as of 29 August 2017) who were then eligible under Plevin. If you were one of these, you should have been notified of this by your bank, but if not, claim anyway.

Since February 2019, PPI claimants who had PPI claims previously rejected may now make a new complaint.

It is not free money. It is your own money you are reclaiming because borrowers were not informed about the cost of the commission throughout their policies. Essentially, those who were rejected under mis-selling rules CAN now complain under Plevin.

and the good news is...

You can reclaim your PPI compensation yourself, for free! Do not contact the hoard of cowboy firms offering to reclaim your PPI for you? They will expect a percentage, usually between 25% and 50% of your claim, for a task you can easily do yourself. For example, if you hire a firm to reclaim your PPI, from a payout of, say, £1000 you will be left with as little as £250. If you claim on your own behalf, you keep all of it.

How to claim

A free and easy step-by-step guide to reclaiming your PPI can be found at the money saving expert website.
I am tired of being asked if I had PPI! Despite having worked for a bank for 42 years, some people still think I might have had it and not know it!
Graham1 wrote: I am tired of being asked if I had PPI! Despite having worked for a bank for 42 years, some people still think I might have had it and not know it!

That's what they mean by mis-sold, Graham, because PPI was stealth-packaged into a product.
I had ppi added by a store card that I didn't know about. They turned me down when I tried to claim through a claim company but they've recently written to me because of the ruling. With a bit of look I'm due something.

My credit card and loan when I first joined civil service had ppi. They told me it wouldn't be approved unless I had it. This I claimed early on and got a substantial payout, and the bonus was I didn't use a claims company so it was all mine.

You definitely don't need a claims company and can save yourself thousands in their commission. :D
Sara2101 wrote: I claimed early on and got a substantial payout, and the bonus was I didn't use a claims company so it was all mine.

Well done, Sara!

These jackal claims companies are exploiting those who wrongly believe one has to be a barrister to take on criminal lenders and reclaim PPI.

The deadline for claims is August 2019. After that, the same jackal companies will then be advertising their services to reclaim the 20% tax from the 8% compensatory interest you have received as part of your redress, which is regarded by HMRC as unearned income and thus taxable. Previously, lenders paid out this compensatory interest gross (i.e. without any deduction of tax); they expected the client to declare the unearned income to HMRC on their tax returns. As clients were failing to do so, HMRC have now insisted that the lenders deduct 20% tax from the 8% compensatory interest before payout.

Don't fall for the hyperbole. The jackal claims companies will offer an expensive service for a task you can easily accomplish yourself with a simple telephone call, as you may be entitled to claim this tax back by contacting HMRC Income Tax enquiries on 0300 200 3300.

You don't need to be Rumpole of the Bailey