Can You Claim PPI For a Deceased Friend or Relative?
The simple answer is yes. If a person who is now deceased had PPI policies in their lifetime, the person dealing with the estate has the right to make a claim on the policy or to reclaim PPI if the policy was mis-sold.
Even though the policyholder has passed away any money owed to them will become part of their estate. It will be up to the executor, administrator or other person appointed to deal with the estate to check for PPI and to make a claim.
Who can claim PPI on behalf of a deceased person?
DECEASED PERSON – FREE PPI CHECK*
Anyone who is a personal representative (PR)can make a claim for PPI for a deceased person. A personal representative is legally entitled to administer the estate and can be an executor or administrator.
If the deceased person left a will, once probate has been granted, the executor(s) named in the will can make a claim for PPI.
However, if a deceased person has no will, they are known to have died intestate. In this situation probate cannot be granted until someone applies for a grant of letters of administration. Once granted the administrator, can make a claim for PPI.
In some situations, a deceased person may have someone named as next of kin. This can be a friend or relative who will be the first person to contact in emergency during a person's lifetime. However, being named next of kin does not mean the person has a legal right to deal with the person's affairs after they die.
To get that legal right the next of kin will have to apply to the court for a grant of letters of administration so they can be appointed an administrator. Only then can they legally deal with the deceased's estate.
Is there an existing PPI policy?
Personal representatives have so much to so when it comes to settling and winding up a deceased person's estate that they often don't consider checking for an existing PPI policy.
If such a policy exists, the PR can make a claim on the policy to help pay some of the deceased's debts.
Should the claim be rejected it is worth looking to see if the PPI was possibly mis-sold and put in a claim for that. Any refund will form part of the deceased's estate and can go towards repaying any debts.
Old PPI Policies Where The Credit Has Been Settled
Where old finance agreements such as previous loans that had PPI have been settled, it may still be possible to recoup some money if the policy was mis-sold. This situation could arise where you, as a PR, go through the deceased's paperwork later and find PPI policies listed which they may not have been eligible for at the time. If this is the case, you should seek specialist legal advice.
To make a claim you will need to provide evidence you have authority to act such as grant of probate.
PPI & How It Was Mis-Sold
The purpose of PPI was to cover credit card and loan repayments if the person insured lost their job or couldn't work because of accident or injury.
Customers were sold PPI by banks and lenders without being fully told what it covered. Some providers lied to their customers telling them the cover was compulsory, when it wasn't, or it was added without the appropriate consent. Others mis-sold PPI to customers without carrying out the relevant checks to see if the cover was suitable, e.g. selling PPI to the self-employed or to people who had pre-existing medical conditions. In these situations, any PPI claims would have been rejected as they would fall under the policy exclusions.
The PPI Boom
A drop in interest rates in the 1990s had a huge effect on how much profit banks made from lending. With such a sharp decline, banks needed to find a way to increase their profits by selling other products. That product was PPI.
Banks and lenders realised that PPI was a highly profitable product and started to sell it aggressively on credit agreements such as; credit cards, mortgages, loans (business & personal), store cards and mail-order catalogues. This went on until 2011.
Banks got away with this because the public had trust in banks and respected them. Because of this selling PPI was made easier. The banks would say you need PPI, it's for your own protection and customers believed them.
It is therefore likely, that people born as far back as the 1930s took out loans or other forms of credit later in their lives, and these finance agreements had PPI attached to them.
How Long Do Banks & Lenders Keep Records?
Banks and lenders are legally obliged to keep all records for a period of six years minimum after a customer closes an account. But, most banks and lenders hold on to records for much longer.
According to the Data Protection Act 1998, once a person has died, they have no rights. But where accounts were held in a joint name and the other person is still alive, that person can request and recover any documents the bank or lender still holds.
In situations where the deceased was the sole account holder and the paperwork is no longer available, it is still possible to make a claim. But there will have to be some evidence to show the deceased had paid for PPI or a strong belief PPI existed.
Information needed to start a deceased PPI claim
Useful information needed to start a deceased PPI claim includes an account number and sort code. Sometimes just having the deceased's full name and previous addresses can be enough to obtain a full banking history dating back to the 1980s.
Before starting a deceased PPI claim it is important to identify who the beneficiaries will be of a successful claim.
To start a claim, you will need to provide a certified copy of the death certificate and of the will (if there was one). Proof of each executor's identification and residency is also a requirement.
If the deceased left no will, things may become a little tricky but not impossible, it will all depend if there is a surviving spouse.
Starting a free deceased person's PPI check
Check to see if a deceased friend or relative ever held a PPI policy by completing our FREE PPI check form.
High Commission and Plevin claims
There is the possibility of now having previously rejected deceased PPI complaints looked at again but from the viewpoint of how much commission was charged on the PPI.
Known as the Plevin rule, it states that if over 50% of your PPI cost went as commission to the lender, and that wasn’t explained to you, you can claim back the extra above that.
If you think this applies to you, please complete our PPI High Commission check form.