Consumers are being urged to check if they are owed money, with just one year to go until the deadline for Payment Protection Insurance (PPI) compensation claims can be made.
The cut-off date for making a PPI claim is 29 August 2019. After this date, consumers will not be able to receive compensation.
PPI was designed to cover repayments in certain circumstances where you couldn’t make them yourself. For example, if you were made redundant or could not work due to an accident or illness.
As many as 64 million PPI policies have been sold in the UK, mostly between 1990 and 2010. However, millions of PPI policies were mis-sold by the banks to customers who did not need them or were put under pressure to sign up - in some cases without their permission or knowledge.
The scandal has created huge costs for banks, with over £29 billion paid out in compensation since the crisis began. Lloyds has been hit the hardest, setting aside more than £19 billion for claims so far.
Hannah Maundrell editor in chief at Money.co.uk comments: “The clock is ticking to get your PPI claim in - lots of people don’t know they were ever paying for PPI so you may have been doing so without even realising. Make checking if you ever paid PPI a priority - it could mean thousands of pounds back in your pocket that’s rightly yours.
“Millions of people have been left out of pocket by the PPI mis-selling scandal so it’s definitely worth checking if you were one of them.”
Reclaim without using a claims management company
Andrew Hagger, a personal finance expert at Moneycomms, urges people who don't have the necessary PPI paperwork not give up at the first hurdle.
He explains: “If you made a loan payment within the last six years which had PPI you are eligible to make a claim. If you don't have your bank loan statements, contact your bank and ask them to check if you had a loan with PPI. I would suggest taking a copy of your request and send the original by recorded delivery.”
Another way to check is to get hold of a copy of your credit report and look for repaid loans, Mr Hagger says.
“It won't show if your loan had PPI or not but at least you know which bank to contact. If your bank says you had PPI but for some reason refuses to pay out, don't give up. Instead, take the matter up with the Financial Ombudsman Service,” he adds.
Mr Hagger warns that using a PPI claims management company could significantly reduce the payout.
He says: “Don't use a PPI claims management company - they could end up taking 30% to 40% of the sum reclaimed just for sending a few letters that you could easily do yourself.”
Ms Maundrell agrees: “Claims management companies will be pushing hard for your custom in the next 12 months but don’t be tempted to use them because they’ll take a cut of the money you’re owed. It’s really easy to check if you had PPI yourself and its simple to make a claim."
To find out more on how to check for or complain about PPI, visit the financial watchdog the Financial Conduct Authority's (FCA) website: Fca.org.uk/ppi/ppi-explained.