Payment Protection Insurance (PPI) Refund FREE complaints guide
Thank you for requesting the Claims Connection PPI Complaint Guide. The Claims Connection website is owned and managed by Winston Solicitors LLP. We deal with many different types of compensation cases but have a special interest in financial complaints. This free guide gives you a brief introduction to the key issues relating to the PPI mis-selling scandal in the UK and includes some very useful links and resources. Please note that we no longer deal with PPI complaints as a business and this guide is for your information only. The information provided should help you determine whether you were potentially mis-sold a PPI policy and if so what you can do to complain about your situation. Making a complaint in respect of mis-sold PPI is intended to be a straightforward process and some members of the public may wish to represent themselves rather than instruct a complaints handler or law firm to assist them in their case. At Winston Solicitors LLP, we recognise this and our PPI Complaints Guide is designed to allow you to prepare and present your case personally if you choose to do so. It is important that you arm yourself with the facts and understand the process before you make your complaint. You should be familiar with the arguments and general principles to ensure that you are not fobbed off by your lender. This guide explains each stage of the process and highlights the major mis-selling practices in the PPI market. It also highlights the defences which may be raised by lenders and what you need to do to rebut them. If you are successful, be careful when considering the amount of your refund; lenders occasionally make mistakes or miscalculate, so ensure that you understand the formula used. THE COMPLAINTS CONNECTION: Free PPI Complaint Guide 1
How do I complaint? 1. Do you have the original paperwork? Your PPI policy If not, request a copy from your lender, enclosing the fee of 10.00. Bear in mind that they may provide you with a sample of what your agreement would have looked like if they have not kept the original. 2. What if you don t remember the lender? If you do not recall who the agreement was with, for a small fee you can obtain a credit report from a credit reference agency, listing all the agreements you have had in the last six years. 3. Check your agreement to see whether you have PPI Look out for references to Payment Protection, Payment Cover, Protection Plan, ASU etc. 4. Do you want to continue with the PPI? PPI can be a useful product. Before you complain, consider whether you want the PPI to end. Do you want PPI? If so, do you wish it to continue with the current provider or to seek cheaper PPI elsewhere? 5. Was your PPI mis-sold? Your complaint Check to see what your PPI covers. Was it appropriate for your requirements at the time? Use our list of 'Ten Common Failings to identify whether your lender was guilty of any mis-selling practices. 6. Send a letter of complaint. If you conclude that your PPI was mis-sold, write to your lender. Enclose a copy of the customer questionnaire (http://www.financial-ombudsman.org.uk/consumer/complaints.htm) and any relevant documentation, kee ping copies for yourself. 7. What happens next? Decision, compensation and Ombudsman Your lender will have five days to acknowledge your letter and 8 weeks to issue a substantive response. If your complaint is rejected, do not be put off; write again. If your lender fails to respond within the time frame, or you are dissatisfied with the response, you may complain to the Ombudsman. 8. Who is the Ombudsman? The Ombudsman, or Financial Ombudsman Service (FOS), is the arbiter for all complaints about financial institutions. It has jurisdiction over all PPI sales from January 2005. 9. How do I deal with the Ombudsman There is a standard form to send to the Ombudsman, available on the FOS website (http://www.financial-ombudsman.org.uk/consumer/complaints.htm). The Ombudsman will acknowledge you r complaint, but it frequently takes at least six months for your complaint to be dealt with. 10. Can I appeal the Ombudsman s decision? The initial decision will often be made by a caseworker. You may apply to have it reviewed by an Ombudsman. If this fails, you still have the theoretical right to issue legal proceedings. However, the prospects of success will be significantly reduced by the unfavourable result of the Ombudsman process. THE COMPLAINTS CONNECTION: Free PPI Complaint Guide 2
10 Common Failings The Financial Services Authority has highlighted various mis-selling practices in the PPI market. If one of the following 10 Common Failings applied to your sale, you may have a complaint. Be aware that there are other potential failings and mis-selling practices of which your lender may have been guilty so, if you are taking on your lender personally, ensure that you do your research. 1. You felt pressured into purchasing the PPI; 2. PPI was automatically included in the loan quotation; 3. You were led to believe that PPI was necessary or would increase your chances of being approved; 4. You were not told that the policy was optional; 5. The lender did not explain whether it was advising on the sale or merely conducting it; 6. The information was not explained to you in a way and at a pace that you could understand, including any exclusions or limitations; 7. You were not provided with the documents required by the rules; 8. You were not informed of the length of the cooling off period; 9. The overall cost of the policy was not explained to you; 10. In respect of a single premium policy, it was not explained to you that interest would be charged on the premium, that no pro-rata refund was available or you were not asked about the chances of the loan being repaid early. THE COMPLAINTS CONNECTION: Free PPI Complaint Guide 3
Common Defences Not all PPI policies were mis-sold. Some were good sales. In such cases, lenders are unlikely to make an offer of settlement. Even in cases where there was a failing, some lenders will prefer to defend the complaint in the first instance, rather than make an offer of settlement. You should be aware of the types of defence which the lender might raise and what you can do to rebut any such defence. You should be prepared to persevere and complain to the Financial Ombudsman Service if necessary. 1. The sale was not regulated The FSA has regulated all PPI sales since January 2005. The handbook provisions only explicitly apply to sales after this date. The FSA has stated that its measures should be interpreted as guidance in relation to pre- 2005 sales. This is because the handbook provisions resemble the rules which previously applied to such sales. The FSA is reluctant to exclude pre-2005 sales from the scope of its measures, since mis-selling practices were at least as bad before this date. Hence, the fact that the policy was sold before 2005 will not necessarily be a bar to a successful complaint. 2. The complaint is time-barred Even if your PPI policy is very old, it s worth looking into whether you are eligible for a refund. Theoretically, if the sale took place more than six years ago, your complaint may be rejected. However, if it s less than three years since you became aware of the cause for complaint, you will still be able to complain. Most people have only recently become aware that their PPI policy may have been mis-sold in light of recent media coverage. 3. You have made a successful complaint against the policy. THE COMPLAINTS CONNECTION: Free PPI Complaint Guide 4
This is not a defence in itself and you may still be entitled to a refund. However, this is subject to two provisos: i) The but for test (see below). ii) Your refund will not include any payments which would have been made but for the successful complaint, for example, payments which were not made during a period of sickness. 4. The customer would have bought the policy but for the failing The bank may assert that the policy was suitable and that you would have bought in any event, ie, you would still have bought the policy but for the failing. There is a presumption that you would not have bought the policy were it not for the failing. Challenge the lender to produce specific evidence to rebut this presumption. You might be able to adduce positive evidence why you would not have bought the policy but for the failing. For example, if you were unemployed, self-employed or a student, evidence of your status as such would amount to strong evidence that you would not have bought the policy. 5. The information was not relevant The lender only has to disclose a lack of pro-rata refunds if it concludes that this information is relevant. The potential defence is that it was not relevant. Highlight that the onus is on the lender to demonstrate that they had good grounds for considering that the information was not relevant; Challenge the lender to point to a specific reason why it was not relevant. You do not necessarily have to give a specific reason why it was relevant. THE COMPLAINTS CONNECTION: Free PPI Complaint Guide 5
You might be able to give a positive reason why the information was relevant in your case. For example, you might have re-financed numerous times previously, demonstrating that you were likely to do so again, or you might have been due to receive some dividend which would allow you to discharge the amount due under the agreement. You might argue that such information is relevant in all cases, since there is always the possibility that you would choose to refinance at some stage, irrespective of your intentions at the point of sale. 6. You had PPI prior to re-financing with the lender Lenders have been known to argue that the fact that you had PPI previously indicates that PPI was suitable for your needs and that you would have opted for it in any event. The FSA policy statement states that lenders are not allowed to use the fact that you had taken out PPI previously to demonstrate that you had knowledge of, or were happy with, the PPI. This is because the earlier policy may also have been mis-sold. 7. You failed to exercise your right to cancel the policy The FSA handbook makes it clear that the firm should not reject a complaint because the complainant failed to exercise the right to cancel the policy 8. You have not produced documentary evidence relating to the policy. The FSA handbook states that negative inferences should not be drawn from a customer s failure to keep information for any particular period. It also says that more weight should be THE COMPLAINTS CONNECTION: Free PPI Complaint Guide 6
given to specific evidence, including oral evidence, of what happened during the sale than to general evidence regarding the firm s selling practices. 9. Another firm is partly or wholly responsible for the matter complained of. In these circumstances, a firm is allowed to forward the complaint to the firm which it believes to be responsible. The matter complained of is the selling of the product, not the product itself, hence the firm is unlikely to be able to forward the complaint. 10. There is no legal cause of action. What can we do to rebut the defence? It is irrelevant whether you might have a legal claim. Breach by the lender of the FSA handbook and policy statement are sufficient grounds to make a complaint. 11. The matter complained of was disclosed to you. For example, it was disclosed to the customer that the policy would not cover a pre-existing medical condition. What can we do to rebut the defence? It is not enough for the firm to disclose the information per se. It must be disclosed in a way which is clear, fair and not misleading, taking into account your individual needs. The information must be given at a speed, tone and using language which you could understand. If you are oblivious to the information that was supposedly disclosed during the sale, this is evidence that the firm did not meet the requirements in your particular case. THE COMPLAINTS CONNECTION: Free PPI Complaint Guide 7
12. The customer would have bought an alternative policy but for the failing. This is not a defence as such. However, it could significantly reduce the amount of your refund. You will only be entitled to the difference between the premiums paid for the PPI and those which you would have paid on the alternative policy. What can we do to rebut the defence? If you would not have bought any PPI policy, you need to make this clear and explain the reasons. An obvious example would be that you were a member of a group which would be excluded from any type of PPI policy, for example, you were unemployed. Thank you for your interest in Winston Solicitors LLP. We hope our guide proves useful and wish you all the very best with your complaint. THE COMPLAINTS CONNECTION: Free PPI Complaint Guide 8