What to Do if Your PPI Claim Is Denied
Having trouble getting your Payment Protection Insurance (PPI) claim accepted? You’ve probably noticed that there’s a wealth of information on how to file a ppi claim, but little to nothing available on what to do if your claim is rejected.
Having helped several of our staff with the task, we’ve become the local defacto experts on the issue, and have some ideas that may help:
The first thing to consider is whether or not you’ve got a valid claim in the first place. Find the letter that you submitted with the company, and go over it as a impartial third party would. A few tips:
Make sure the letter does not contain any impolite or emotional language. While it might feel good to vent your feelings on the topic, it may actually hurt your chances of approval, as it’s a distraction from the matter at hand…getting your money back.
Also check that you’ve included all the relevant information. If you’ve missed, for example, putting in the loan number, or ppi policy number, that may be the issue. The most crucial piece of information, however, is the list of valid reasons that confirm that you were mis-sold the PPI. Your best approach is to use the reasons listed in the official documentation verbatim, rather than using your own language. This article from the Telegraph is a great resource in that regard. While the following is only a partial list, it does cover several valid indicators that you were mis-sold ppi:
- If you were under the age of 18, or over the age of 65
- Your employment was part-time (less than 16 hours per week)
- You were a temporary or contract employee at the time you purchase the PPI coverage
- You run your own business, or were otherwise self-employed when the PPI was sold to you
- The lender did not inform you that the PPI policy does not cover certain stress-related conditions, despression, or chronic back pain.
Be Honest with Yourself
The most common reason for a claim being denied is a specific exclusion in the terms and conditions of the PPI policy. For example, most PPI policies specifically exclude payment for any pre existing medical condition. If the company was able to determine that the illness that prompted your claim existed before you sign the policy…then your claim is invalid. While denied benefits can be frustrating, there are some situations where the provider is in the right.
Should I file a complaint to the Financial Ombudsman Service?
That’s your right, but it is usually a better idea to give the original business you bought the PPI from a second chance to look into the complaint. The ombudsman is a great resource, but it is not a fast one. In most cases, resubmitting your claim, as outlined above is your fastest path to get the problem solved.
If you feel like you have exhausted all other options, an appeal with the Ombudsman is usually successful, if a bit slow. When brought to appeal through the Ombudsman, approximately 98 percent of PPI claims are overturned in favor of the borrower. That’s significantly higher than their average of about 70 percent in favor of the consumer in other, non-PPI related matters.
What about using a 3rd party to resubmit my claim?
Many PPI filers are choosing to use commercial claims services. Since April of 2007, these claims-management companies must, by law, be authorised by the Ministry of Justice. Going with an authorised company reduces your risk of getting poor service. Before you sign on with anyone offering to file a claim on your behalf, check the list of approved companies on the Ministry’s website.
Also make sure you understand their fee structure and terms. Some firms charge a percentage, while other charged a fixed fee. Doing the math beforehand will ensure that you don’t have any surprises.
The Final Word
The process can be frustrating, and so, it might make sense for you to have a look at your PPI policy and determine how much you paid into the insurance. The claim amount cannot exceed what you’ve paid in, so having a look at the total may help you decide if appealing, or refiling your claim is worth the amount of time and effort that you will need to put into it. If you feel like the work is worth more than the reward, then you should consider either dropping the matter, or outsourcing it to a 3rd party claims company that will do the work for either a flat fee, or some percentage of any recovered funds.