Payment Protection Insurance (PPI) has been sold and added on to credit cards to cover the repayments of the person who took out the credit card if their personal and financial circumstances changed such as having to take time off work due to illness, an accident and in some instances unemployment. Credit Card PPI will normally only cover you for a maximum of 12 months and should you need to use the policy there are many exclusions that could prevent you from using the policy even though you may have been paying for the policy for many years.
It has been the case that PPI has been widely mis-sold.
PPI has been sold as far back as the 1980’s and many people do not know if PPI was added on to their credit card accounts.
No matter when your credit card was arranged, whether or not you have an active PPI policy or whether or not your credit card account is still active, if you have a concern about how PPI was sold to you or you are not sure if you have ever had PPI attached to your credit card, then you are entitled to complain about PPI or be provided with PPI information from the credit card lender or provider.
Which Lenders Credit Cards Was PPI Sold On?
PPI was sold on and added on to credit cards by most of the major high street banks and many of the online and postal credit card issuers. The most popular credit cards that PPI was sold and added on to are:
Bank of Scotland
Royal Bank of Scotland (RBS)
This is not all of the lenders credit cards that PPI was sold and added on to and if you require any further information on any of the above mentioned lenders or any other credit card lenders/providers that you have previously taken out then please have a look through our lenders page on this website where we have provided further information on credit cards that PPI was sold on and which lenders and companies are responsible for the sale of PPI.
How Is Credit Card PPI Charged And How Much Does It Cost?
PPI is paid for in a few different ways depending on what it was sold with. Credit card PPI policies are paid for by monthly premiums and there are normally three sums that make up the total cost of a credit card PPI policy:
Firstly: Credit card PPI premiums are set as a percentage of the monthly outstanding balance on the credit card and lenders typically charge 79p for PPI on every £100 of debt outstanding on a credit card.
Secondly: Interest is then charged on top of the monthly PPI premium at the same rate that is charged for the credit card outstanding balance if PPI had not been added.
Thirdly: Charges may be made to the credit card account if payments are missed and if PPI is present on the account at this time then the charges will be higher than if PPI was not added to the account and this can leave the account holder more in debt.
As you can see from the above information the monthly PPI premium stated by a lender for a credit card is only the initial aspect of the cost of taking PPI. This is because the monthly PPI premium, when added to the on-going balance of the card (which can incur interest in excess of 15%), increases the cost of PPI substantially.
The table below is taken from a 2005 report carried out by the Citizens Advice (CAB). The report was called Protection Racket and it listed the concerns that the CAB had in relation to the sale of PPI. The table shows a comparison of the costs and benefits of PPI policies being offered to credit card customers from some of the largest lenders that sold PPI at that time:
The above table clearly shows that the PPI policies offered by some of the biggest credit card lenders in the UK only offered a maximum of 12 months payments should the policy need to be used due to unemployment. In addition to this the monthly payment made or often referred to as the monthly benefit, would only cover a maximum of 10% of the outstanding credit card balance. This kind of information was regularly not being provided to clients when they were sold PPI on their credit cards and in a lot of instances clients actually had no idea what they were being signed up for when purchasing PPI or they didn’t even know that the PPI had been added.
How Was Credit Card PPI Mis-sold?
Payment Protection Insurance (PPI) has been mis-sold to millions of people but the good news is you can claim compensation If you think you’ve been mis-sold credit card PPI. PPI was routinely mis-sold and added on to credit cards by the seller of the PPI by them not being honest or providing the proper or correct information to the customer at the point of sale or addition of the PPI. In a lot of instances PPI was being sold or added on to credit cards without the seller of the PPI even checking that the PPI was suitable for the customer, that the customer was eligible for the PPI, or whether in fact the customer even required or wanted the PPI.
The most common reasons that Credit Card PPI may have been mis-sold are:
You felt under pressure to take the PPI policy in order for your finance to be approved
The policy was added to the finance without your knowledge or approval.
Your employment status made you exempt. For example you may have been self-employed or in receipt of full sick pay from your employer in the event of accident or illness.
You were not explained the terms & conditions and was unaware of the additional cost and possible cancellation fees.
You had a pre-existing medical condition or were registered disabled at the time the policy started.
Your age prevented you from qualifying. For example many people were sold a PPI policy when they were already past retirement age or would have been at any stage during the repayment term.
You had another similar or existing insurance policy. For example life insurance attached to a mortgage.
Sometimes it was incorrectly stated that this insurance improved their chances of getting the loan or that the insurance was mandatory.
Due to the high profitability from PPI sales, staff were targeted on sales of PPI & high commission levels were paid, which is believed to have contributed to the mis-selling of these policies.
Can I Check or Claim For Credit Card PPI Even If I Do Not Remember Who The Lender Was?
Many people cannot remember the names of the lenders that they have previously taken out their finances with such as loans, mortgages, credit cards, and store cards etc. This is a common problem for people trying to check if they may have had Credit Card PPI or claim for mis-sold Credit Card PPI. Due to the amount of time that may have passed since the accounts were last open or the different lenders that customers have taken finances out with over the years it can be difficult for them to recall which exact lenders that they have used.
We have successfully helped many clients in these circumstances to identify who the lenders were that they had taken out their previous finances with, then to check if any PPI had been added to their finances, and then to claim back for any PPI that had been identified on the finances that the client felt had been mis-sold.
There are many ways to check for any PPI that may have been added on to your finances such as checking credit agreements, your credit report, with the lender, and in your older documents that may be stored away in a loft, garage or filing cabinet.
If you are having trouble remembering the names of the companies that you have previously taken out finances with or you are unsure if you have had or do have Credit Card PPI and are not sure how to proceed then we can assist you to identify your previous lenders and if you may have had PPI added to or sold with any of your finances.
How Much Is a Credit Card PPI Claim Worth?
If you do have a credit card PPI complaint that is upheld then the PPI lender or provider of the PPI should also correct and pay you back any further losses you have had as a result of PPI such as any arrears charges due to taking the card. So in effect a successful credit card PPI complaint offer should take in to consideration the initial monthly cost of the PPI, any interest that is charged on top of the PPI monthly payments, and any missed payments or arrears charges that may have been charged and have affected the cost of the PPI. Once the amount of PPI owed back as part of a PPI refund is worked out and calculated an additional amount of 8% statutory interest should then be added on to the PPI refund due to make the total amount that is to be paid to the customer for mis-sold PPI.
The 8% statutory interest is for financial loss through being ``deprived`` of money that the customer should have had because the business's mistake or bad advice led them to take out an investment or account that wasn't suitable for them.
Undisclosed Commission PPI Complaints (Plevin)
The Financial Conduct Authority (FCA) have issued new rules and guidance around the high levels of commission earned by financial providers through the sale of PPI. The new FCA rules and guidance on high commissions have been in effect from 29 August 2017.
Typically a high level of PPI commission is considered to be at least 50% of the total PPI premium paid. The main basis of a PPI commissions or Plevin complaint as it is often referred to as , is that the bank or provider earned a high level of commission from the sale of PPI but did not tell you this when you bought it.
Not everyone who complains about PPI will be affected by the Plevin ruling. If you have already had a full refund of your PPI then there is no need to complain about unfair commission, as you would have already had everything back that you paid for PPI as part of your refund.
However If you have already complained about mis-sold PPI but you didn’t get a refund you might be able to complain about unfair commission if any of the following 2 reasons apply to you
1-You took out the credit the PPI was sold with (for example, a loan or credit card) on or after 6 April 2007;
2-You took out the credit the PPI was sold with before 6 April 2007, and it was still running on or after 6 April 2008.
You will need to ensure that any Credit Card PPI commission’s complaints are made before 29th August 2019 as you will not be able to complain after this date. Please also note that although there is now a deadline of 29 August 2019 some people will have an earlier deadline to complain about mis-selling of PPI.
When Is The PPI Deadline?
The Financial Conduct Authority (FCA) who regulates the financial services industry in the UK, including banks and other providers have now set a deadline date of 29 August 2019 to complain about PPI. This means that anyone who is wishing to make a claim for mis-sold PPI will need to ensure that they have complained to the lender, bank, or PPI provider by 29 August 2019 and the complaint must be received by the firm you’re complaining to on or before 29 August 2019 or run the risk of not having the PPI complaint considered.
The Financial Conduct Authority and Credit Card PPI Complaints
The Financial Conduct Authority (FCA) regulate the financial sector in the UK and they are responsible for ensuring that markets work well, fairly, competitively and they benefit customers. Most banks, credit card companies, mortgage companies, and building societies in the UK are regulated by the FCA.
The FCA was established on 1 April 2013 and took over from the previous regulator of the financial services sector in the UK, which was the Financial Services Authority (FSA). The FSA had been set up by the UK government under the Financial Services and Markets Act 2000, and they were the single regulator for financial services in the UK since December 2001 until the FSA was abolished and replaced by the FCA in April 2013.
If you have a credit card PPI complaint against a lender or provider it is important that you understand the FCA do not investigate individual complaints so you will not be able to contact the FCA with a PPI complaint. If you have a PPI complaint it is best to complain to the company that sold the PPI first and ask them to put things right. All companies that are regulated by the FCA must have a procedure in place for resolving disputes with their customers and respond to you within set deadlines.
All FCA regulated companies are also required to respond in writing to you just to let you know they have received your complaint, they must also respond to your complaint in writing within 8 weeks to provide you with a final response, telling you whether your PPI complaint has been successful or why they need more time to look into it.
If you are not happy with the companies final response, if they reject your complaint, or if you do not hear from them within 8 weeks, then you may be entitled to ask the Financial Ombudsman Service (FOS) to look in to the problem for you and make an unbiased decision.
Remember: You will need to complain about mis-sold Credit Card PPI to the business by 29 August 2019 which is the PPI Claims Deadline. Other time limits might apply, so if you think that you have got a Credit Card PPI complaint, act as soon as possible.
The Financial Ombudsman Service (FOS) and Credit Card PPI Complaints
The Financial Ombudsman Service (FOS) was established in the UK in 2000 to help settle disputes between consumers and UK based financial services businesses, such as banks, building societies, insurance companies, finance companies, financial advisers and investment firms.
You must first complain to the business that you are not happy with and give them the chance to put things right before the FOS will look in to a Credit Card PPI complaint, as the FOS cannot look in to Credit Card PPI complaints unless you have complained to the business you are not happy with and you are not happy with the companies final response, or if they have rejected your complaint, or if you do not hear from them within 8 weeks of making your PPI complaint.
You will need to contact the FOS about a Credit Card PPI complaint within six months of the business’s final response. If you do not contact the FOS about a Credit Card PPI complaint within six months of the business’s final response then the FOS may not be able to look in to the complaint for you and it will be at the business’s discretion if they allow the FOS to look in to the complaint.
The Financial Services Compensation Scheme (FSCS) and Credit Card PPI Complaints
The Financial Services Compensation Scheme (FSCS) was established in the UK in 2001 to protect consumers when authorised financial services firms fail. The FSCS cover business conducted by firms authorised by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA).
They may pay compensation if a firm is unable or likely to be unable to pay claims against it. This is usually because the firm has stopped trading or has been declared in default. It is important to understand that the FSCS will only pay out a maximum of 90% of a Credit Card PPI claim for general insurance advice and arranging and the FSCS can pay compensation only for financial loss.
The FSCS does not cover the Channel Islands or The Isle of Man.
If you are looking to claim back Credit Card PPI from a lender that has now stopped trading or has been declared in default then please do not hesitate to contact us and we will be happy to assist you. We have assisted many clients to claim PPI from the FSCS when their lender has stopped trading or has been declared in default.
Due to the PPI deadline of 29 August 2019 we are no longer taking on any new PPI Clients. We will continue to carry out work for the clients that we are already working on behalf of so that we can provide the best service possible to them.