Which? is warning that consumers are potentially at risk of missing out on claiming compensation for mis-sold PPI due to a lack of awareness of the deadline, negative perceptions of the claims process and a limited knowledge of the Plevin rule.
A survey by Which? has found that over a third (38%) of consumers are unaware of the two-year deadline to lodge a claim that was announced by the Financial Conduct Authority (FCA) in March and comes into effect on Tuesday (29th August). This could mean that significant amounts of money will be left unclaimed unless people take action.
The survey also found that many consumers have still not made a PPI claim despite saying that they think they might have been mis-sold PPI, citing concerns with the claim process as a reason for their inaction. The main barriers to people claiming include a perception that it’s too much hassle (28%), lost paperwork (42%) and thinking that the potential amount of compensation is not worth the effort (19%).
The average successful PPI claimant receives around £1,200 through mis-sold PPI and the latest figures from the FCA show that £27.4 billion has been paid out since January 2011. With such vast sums successfully retrieved, and many more consumers either unaware, or deterred by the process, Which? is encouraging potential claimants to use its PPI tool.
To help make it easier for people to claim for mis-sold PPI, Which? has developed a free online tool that provides a streamlined, stress-free way of seeking compensation that requires no paperwork. Built in consultation with major high street banks, it enables successful claimants to keep 100% of their compensation, as opposed to using costly claims management companies that can charge fees of up to a third of the compensation paid out. Which? found that 14% of consumers who have still not made a PPI claim despite saying that they think they might have been mis-sold PPI were put off lodging claims because they didn’t want to have to pay a fee for doing so.
In addition to the deadline, new rules based on the Plevin high court ruling come into effect on Tuesday. This means customers, including those who have had a PPI claim previously rejected, can claim back the difference and interest from mis-sold PPI where the cost was made up of more than 50% commission and the consumer was not informed. This makes thousands more eligible for compensation. However, Which? discovered a significant lack of knowledge of the Plevin entitlement, with 80% unaware of this potential route to compensation.
Alex Neill, Managing Director of Which? Home Products and Services, said:
“With just two years left for consumers to claim compensation for mis-sold PPI it is worrying that so many are unaware of this deadline, while others have been put off from claiming because they think it’s too much hassle or they don’t want to pay a fee.
“Previously unsuccessful claimants should consider re-submitting their complaint due to the new Plevin ruling which has made thousands more consumers eligible for compensation. Act now – time is running out.”
Notes to editors
- The Which? PPI tool can be found here: http://www.which.co.uk/consumer-rights/advice/how-to-reclaim-mis-sold-ppi
- Which? have created a short animation explaining the upcoming deadline. It can be embedded to your website by clicking this link
- Populus polled a total of 2100 general population respondents on our behalf, via an online omnibus survey. Fieldwork was carried out between the 21st and 22nd of August. We asked all respondents whether they had ever taken out one or more of the following financial products: personal loan, credit card, a mortgage, store card, car finance or products bought on hire purchase. We excluded consumers from this survey who had never had one of these products.
- A total of £260m was paid in May 2017 to customers who complained about the way they were sold payment protection insurance (PPI). This takes the amount paid since January 2011 to £27.4bn. https://www.fca.org.uk/news/ppi-monthly-refunds-compensation