Factsheet

Claiming compensation for mis-sold payment protection insurance (PPI)

Things you need to know

In April 2011, the High Court ordered banks to pay back up to £4.5 billion in compensation to consumers over the mis-selling of payment protection insurance (PPI).

You could have been mis-sold PPI in a number of ways. The most obvious of these are cases where people have been sold insurance when they had no chance of claiming on it. For example, if you were not working for any reason at the time you took out the insurance, you would not have been able to make a claim.

There are a wide range of reasons that may make you eligible for compensation. For more information about these, please visit the Financial Ombudsman Service website or www.justice.gov.uk.

Making a claim

You need to make the claim to the business that sold you the policy, such as your bank. If you are not happy with the way they deal with your claim, you can make a complaint to the Financial Ombudsman. You can make your claim in a variety of ways:

  • You can do it yourself, using the forms on the Financial Ombudsman's website (these include forms for making a claim to the business and a complaint to the Ombudsman).
  • You can use a claims management company (CMC).
  • You can ask a solicitor to act on your behalf.

It is up to you which route you choose, but you should be aware of the following:

  • Don't just wait for the bank to contact you. You will need to make a claim if you want to get back what you have paid for PPI.
  • Claiming is quite straightforward and there is a lot of information available to help you through the process (e.g. on the Financial Ombudsman's website  or the Which? website). You may also be able to get help from your local Citizens' Advice Bureau.
  • Your case will be decided in the same way, whether you choose to claim directly or use a CMC or solicitor.
  • The amount of compensation awarded will be the same whether you make the claim yourself or someone submits it on your behalf.
  • If you use a solicitor or CMC, you will have to pay for their services, and they will normally charge a percentage of the compensation awarded.
  • If you decide to use a solicitor or CMC, choose carefully. Make sure you are clear about the service you will receive and how much it will cost.

Solicitors and their firms are regulated by the Solicitors Regulation Authority (SRA) and are bound by the SRA Principles and a Code of Conduct. For example, they must provide you with a proper standard of service and act in your best interests. You can find more information about the service you can expect from a solicitor.

Claims Management Companies are regulated by the Claims Management Regulator. For more information, go to www.justice.gov.uk.