The PPI scandal: what happened and how you can make a claim

The PPI scandal has seen firms pay back £31.5 billion so far since January 2011 to customers complaining about policies.

The deadline for making a PPI complaint is August 29 2019.

Here is how the scandal erupted and how you can make a claim:

– Why did PPI become controversial?

PPI (payment protection insurance) was designed to help people continue making payments in certain circumstances, such as if they lost their job or had an accident. It was often added to financial agreements such as loans, credit cards and mortgages, particularly from the 1990s to around 2010.

It became controversial because it had been widely mis-sold – it was unsuitable for some people, people did not realise it was optional or, in some cases, they did not even know they had a policy.

It is the biggest mis-selling scandal the Financial Ombudsman Service (FOS) has ever seen.

– What else might be relevant if I’m deciding whether to complain?

New rules mean that, crucially, even if you do not think you were mis-sold a policy, you may be able to complain about commission earned by a provider as a reward for the sale of PPI.

Banks and other providers were often paid commission by the insurer, as a reward for the sale of PPI. The money for this commission would come out of the payments you made for the policy.

You do not need to have prior knowledge of how much commission was paid for your PPI – it is unlikely you would have been told when the policy was sold to you in any case.

You can complain about this even if you had a previous complaint about mis-selling of PPI rejected.

– How can I complain?

Some people have used claims management firms, which take a chunk of any payout – but people can make claims themselves free of charge.

There is plenty of help available to make a claim yourself, from consumer champions such as MoneySavingExpert.com, Citizens Advice and Which? on their websites.

The Financial Conduct Authority (FCA) and the FOS also have help on their websites.

– What if I’m not happy with the outcome after making a complaint to a firm?

If you have already complained to the firm and are unhappy with the outcome, you can take your case to the FOS, which resolves disputes between consumers and financial firms.