If you have claimed on your Payment Protection Insurance (PPI) policy in the past (as an example, against unemployment where the policy paid out) you can still make a successful claim against the Lender who sold that policy.
The mis-selling of Payment Protection Insurance policies is not about whether you can make an effective claim on it, but depends upon the sales process involved when the policy was taken out. Therefore if you have had a PPI policy and you have made a claim against the benefits of that policy and received monies, then you can still make an effective claim on the policy itself. However, should a refund be obtained, there is likely to be a reduction – that being the amount you received at the time the claim was made, against any refund that was made. The Bank will not go back after you if the amount you historically claimed was greater than the refund.
We have dealt with a large number of clients who have made successful claims on their policies in the past, but upon the Bank investigating the sales process involved in establishing the policy, it had not been dealt with correctly and it has been established that the policy was not appropriate for a number of aspects of the policy. This is the most important aspect, and not the fact that you could or could not make a claim on it at some point after taking it out.
The Banks are required by internal regulation and regulation through their appropriate authorities (in this circumstance the Financial Services Authority, now known as the Financial Conduct Authority [FCA]) to deal with sales of various products, such as PPI in an appropriate manner. The reason why the Banks have been brought to task with regard to the mis-selling of PPI is that they widely mis-sold it by not dealing with clients in an appropriate and fair way.
In order to successfully sell a PPI product, the Bank should have established:-
- That it was an appropriate facility for the client and;
- The client understood the full costs and implications of the policy itself and;
- The client should have been made fully aware, understood and agreed to any potential exclusions in relation to the policy and;
- How the policy would work in relation to certain circumstances.
The vast majority of Lenders did not undertake the sales process with part, or even any of these particular points being addressed. The PPI product was instead pushed onto the client with them being told it was part of the facility, or the PPI was not explained at all and just added without the customer’s knowledge or, where the policy was wholly inappropriate, it was still added to the facility and the customer told that it was correct.
So far the PPI debacle has cost the British Banking Industry approximately £25billion, with this figure set to increase over the next two years until the conclusion of PPI claims. If for some reason you have been put off making a claim, because you believe that as a result of making a successful claim in the past you would not be eligible, then do not let that put you off. It is essential that you make a claim and establish if the product was sold correctly or not.