A simple explanation of what PPI is will aid in the understanding of what PPI Mis-Selling is. Payment Protection Insurance (PPI) is an insurance sold alongside loans, credit cards as well as other finance agreements to ensure payments are made by the insurer should the borrower fail to cover the payments because of unemployment or sickness.
Now a Mis-Selling of a PPI happens when one gets a useless insurance which one cannot use to claim. In the legal field, PPI Mis-Selling technically termed as professional negligence and a policyholder can claim.
In the UK, quite a number of policyholders found the PPI insurance useless. Those who are self-employed or retired could not claim and it appeared that huge numbers of policies we’re mis-sold for this and many other reasons.
A ruling that is fully accepted by the PPI industry explains that banks must trawl their records for PPI policies that were mis-sold as well as informing the policyholders that they were unable to reclaim their premiums.
A task of identifying customers that banks know they have been mis-sold PPI was started by the Banks.
As per the Financial Services Authority (FSA) guidelines banks are required to get in touch with customers anytime they see a systematic issue in the way policies were sold. Should the policies sold to clients not comply with the FSA rules, an insurance company must write to customers explaining how they can reclaim their premiums.
Here is an obligation to all insurance sellers to keep you in touch in case of a PPI Mis-Selling. If they fail to do so, you can sue them for professional negligence.
Should you receive a letter in this sense, it means that the bank has spotted an issue with how your policy was sold. You need then to follow instructions laid out by your bank and seek a claim. You are eligible for a compensation since there is a high possibility your policy was mis-sold.
Some policyholders may not receive a letter which means they cannot claim for PPI Mis-Selling. This could only mean that you were not mis-sold PPI because of a systematic failing of the bank.
There may still be a possibility that your policy was mis-sold due to an action or omission by the member of the staff selling the policy. You can actually sue for such kind of professional negligence. PPI reclaiming guides are available online.
Once you get your claim for a PPI mis-sale is rejected, you’ll need to contact the Financial Ombudsman Services (FOS). These will investigate and guide you on steps to pursue a claim. A bank may have rejected a claim but a High Court ruling may make it revisit the claim.
For those who have been rejected by both the policy seller and the FOS, their claim has been rejected by the Ombudsman and their claim has failed, meaning no recompense.