We get a lot of questions about PPI – there’s a lot of fake news and noise about. So here are our top ten PPI myths – debunked!
PPI myth no. 10. You have an automatic right to claim back your PPI
OK – so we don’t help this – we’re a claims management company after all. It’s unfortunate that this is the name that’s stuck – we should really be a Complaints Management Company. There is no automatic right to claim back PPI. As with any financial product, you can make a complaint to the company who sold or provides that product if you believe they have done something wrong.
In the case of PPI, what you are doing (usually) is complaining about how they sold PPI to you.
So what? This means that you need to know why you’re complaining. You can find some of that information on the Web, but we do come across a lot of clients who are still confused about what is and isn’t mis-selling. This can mean that they will sometimes say things to banks which are the exact opposite of what they would say if they had a valid complaint.
PPI myth no. 9. Claims management companies will take 25/30/35% + VAT of your PPI claim
The fee is like anything else you pay for – it’s a price and prices vary. Some articles and even regulator information state one (often very high) price for using a claims management service. Put simply, they’re talking out of their ar….ticles and they’re not helping consumers by spreading incorrect information.
You can shop around. Our fee is 15%+VAT (18% total). You may find a few around even lower. We recommend shopping around. Once you’re happy with everything else about a company and its service – you should consider price carefully.
Some people find % fees confusing, so let’s look at an example. The difference between 15% and 30% as a fee rate is not 15% – in fact you will be paying 100% more if you go with the higher rate.
How? Let’s use a PPI refund of £1,000 as an example… £1,000 times 15% = a £150 fee, £1,000 times 30% = £300. £300 minus £150 = £150. So the difference in fees is as much as the lower cost company’s fee (or 100%). This example has left out VAT to keep things simple, but it doesn’t change the point.
You can see a comparison of our fees against some other companies and how it affects what you pay on our compare fees page.
PPI myth no. 8. PPI was ALWAYS a bad idea
PPI was mostly (in our humble opinion) there for the benefit of the banks and insurers. They made a lot of money from it (sometimes earning very high commission). But it also protected the banks because if you couldn’t pay for your credit card or loan, they ‘d have a better chance of getting some money from the insurance.
But in the case of mortgages, PPI was often a good idea. If you had an accident, got sick or were made redundant and couldn’t pay your mortgage, you could lose your home. So having insurance to protect against that was not a bad idea. If they sold it carefully and you knew you what you were buying, this was not a mis-sell.
Mortgage PPI complaints are not upheld as often for this reason. This doesn’t mean that you shouldn’t complain if you have a good reason to believe they mis-sold PPI to you.
PPI myth no. 7. It’s hard to complain yourself
Myth- in fact sometimes you can just ring your bank and perhaps fill in a form. This is mainly true if you understand what was and wasn’t mis-selling and can tell them why you were mis-sold. You’ll find template letters and lots of other help online (on our site or places like Moneysavingexpert).
- Confident completing a form or writing a letter and
- Don’t mind dealing with banks etc and
- Most importantly, will not get put off if you need to do something extra they ask or need to go the ombudsman…
…it’s worth having a try yourself.
PPI myth no. 6. It’s easy to complain yourself
It’s not always as easy as some make out or it should be. From dealing with many cases, we know that it can go wrong, or it can taek a lot of perseverance. The simple view of sending a form letter as described by some journalists and others is not always the case.
Once you’ve started a complaint, clocks start ticking so this can be a problem If you have a setback and then are too busy to deal with it, you can find yourself exceeding a time limit. The process is not as fair for the consumer as it should be in our view.
Although people write articles just saying to fill in form or send a simple letter, our advice would be to make sure you understand the basics of mis-selling first. As we work on complaints with our clients we come across many who miss out information which can make the difference between success and failure – they just don’t know it’s important. We take a lot of time and trouble when a case is weak to make sure nothing is missed. The banks won’t do that for you.
If you’re not sure it’s worth the effort, don’t think you’ll have time or may get delayed by something else half-way, consider whether using a claims management company might be right for you. If it is, just make sure to shop around to get the best deal. You can fill out our form on the right if you’d like more information sent to you. There’s no obligation and we don’t pester.
PPI myth no. 5. xyz claims company can go back 20 years
We often hear from clients that they’ve heard or been told that another claims company can go back a 20 years or whatever when searching. This is rubbish. The amount of time anyone can go back is set only by a) whether you have your own proof of PPI being paid or b) the bank holds records of this.
Each bank, each type of account and each customer is different. No one can tell you in advance how long they can go back in time. The only exception to this is that the banks should have records for at least six years after you closed any account.
PPI myth no. 4. There’s plenty of time to complain because the deadline isn’t until 2019
This has not been true for some time. Many customers will have received letters from banks as long ago as 2013 warning them that there may have been a problem with PPI on an account. Those letters started a 3 year time limit. So some customers are out of luck and banks will not accept a complaint even where there’s an open and shut case.
We can sometimes assist with these situations, so it’s still worth asking for a claims pack from us and then just making a note of your situation. The main lesson is not to delay.
We’ve also seen some changes in the way some lenders are handling complaints. They are rejecting complaints without even considering them in some cases. We can’t go into details of their reasons, but we believe they are wrong and will typically challenge these with the ombudsman.
Bear in mind that as we approach the deadline, the already busy banks and ombudsman are getting busier.
PPI myth no. 3. PPI claims companies are all the same
Yes and no. There’s an awful lot of rubbish talked in adverts about what one company does that’s different to another (and possibly even more on those cold calls). In truth we mostly follow a very similar process and do a similar job.
Any differences come down to:-
- Approach to marketing and advertising – do they cold call or buy leads from cold call companies?
- Size of the company – e.g. huge with call centres with thousands of customers or a smaller company where you talk to the actual claims handlers?
- Do they charge an upfront fee? Avoid these!
- Do they charge any other costs (e.g. costs for searches) – make sure its a fully inclusive service or it’s not “no win, no fee” really is it?
- The price / fee %.
You might see claims companies trying to make themselves stand out in other ways of course, but be cautious about claims. “We go back further”, “we’re faster”, “We have a higher success rate”. Generally these are, shall we say, “unsupported” claims and most have disappeared as the regulator stamps them out.
But there’s still a lot of rubbish talked. For example, you may have seen adverts on TV saying you could be owed “up to £7000”. First of all, as with any SALE! sign you see – if it has “up to” in small letters it of course means – could be £0-£7000. In this case even that’s wrong because PPI redress can be more than this – the highest for one of our clients so far from one bank was £58,000. That’s rare – the average is around £2,400 (for us and a couple of other companies we speak with), but the truth is no one knows what yours will be. £7000?? As that other company might say, “what’s going on?”.
Do we talk rubbish as well? Possibly. We try to stand out by being “fairer”. For us that means being refreshingly honest, not making everyone’s lives worse with spam and cold calls and having a very competitive fee. You can judge for yourself whether you think that’s all just talk or not or even if it matters to you.
PPI myth no. 2. I didn’t have PPI so it’s not worth complaining
Possibly. If you’ve never had a credit card, store card, overdraft, loan or mortgage, you’re probably safe to say you don’t need to think about PPI ever again.
If you only had a credit card/store card but paid it off in full every month, you won’t have paid PPI because PPI is charged on the outstanding balance each month.
But for everyone else, you may not know or may not remember. Clients are often surprised that we’ve found PPI for them. They never expected it, they thought they’d always said no etc. Some people have had cards where PPI was on their statements every month, but they either didn’t check the detail or saw a charge but had no idea back then what it was and then forgot about it.
PPI myth no. 1. I don’t have any paperwork so I can’t claim
The majority of people don’t have paperwork when they start their claims – this is not a problem. We just need your details, your previous addresses (at least any which the banks may have on record) and the companies (banks, credit card companies etc) you want us to check for you. That’s it.