Have you received a PPI claim rejection letter?
Receiving a letter to say that your PPI claim has been rejected is disappointing. However, there can be any number of reasons why your claim has been rejected.
- Not Enough Evidence
In some cases, enough information has not been supplied to the bank or lender for them to find your records. All you need to do is provide further information as this will help to strengthen your case leading to a better outcome.
- Mistake or Error
It came to light that many banks wrongly rejected PPI claims from their customers. Some banks acknowledged that they made a mistake. However, due to the high levels of rejection in the early days of the scandal, the Financial Conduct Authority (FCA) fined some lenders for not dealing with complaints properly. The FCA found that customers who were making legitimate claims, found their complaints were being rejected.
The bank or lender concerned may no longer have a record of your transaction as lenders are only legally required to keep records for seven years.
FREE ‘PLEVIN’ PPI CHECK*
If the PPI policy was mis-sold to you and your claim was still rejected, you can appeal the decision. Bear in mind that the bank or lender must inform you of the reasons why your claim has been rejected.
Why You Need to Reclaim PPI Now
There was a push to sell PPI policies from 1990 to 2010. Banks and lenders sold them offering little or no information about the product and without any proper assessments about the suitability to the customer. This resulted in policies being sold to those who had pre-existing medical conditions, for example, who would never meet the criteria of the policy. Others were told it was compulsory or it would improve their credit score if they purchased the policy. As these are all untruths, the policies were mis-sold.
If a claim under the policy resulted in rejection, you have the option of submitting a further claim under the Plevin Rule, or an appeal can be lodged with the Financial Ombudsman Scheme (FOS). This must be done within six months of receiving your rejection letter.
What Is the Plevin Rule?
The Plevin rule refers to the amount of commission you were charged on the PPI policy.
The rule is based on a 2014 Supreme Court decision of Susan Plevin who filed a claim against Paragon Personal Finance. During the case, information came to light that 71% of the cost of PPI was paid as commission to Paragon.
Plevin said that had she known how much commission was involved at the point of sale, she may not have purchased the policy as it wasn't value for money. The court ruled in favour of Plevin because of the non-disclosure of the commission and the 'unfair relationship' that existed between Plevin and Paragon under s.140 Consumer Credit Act 1974.
The FCA rule, based on this decision, is that if the amount of commission paid by the customer is over 50% of the PPI sale, you can make a claim to recover the amount over 50% you paid in commission.
High Commission PPI Policies
At one point, banks were charging 67% commission on PPI polices. As customers were unaware of this at the time of taking out the PPI policy, many thousands could be successful in making a claim against their bank or lender for undisclosed high commission. This would especially be the case if a previous claim for mis-sold PPI has been rejected.
What the FOS can do for You?
The FOS is an independent body that has a team of adjudicators who review each PPI case, free of charge. In most cases the FOS will overturn a banks' decision and award the customer compensation.
When referring a complaint to the FOS you will need to give them with as much information as possible. Include all communication you've had with your bank or lender and a copy of the standard PPI complaint form (if you completed one.)
All the information provided is examined by the FOS before they contact the bank or lender involved asking for their point of view and information about your PPI claim. Once all the information has been received the FOS will decide if your complaint is to be upheld or not.
This process may take some time - anywhere from several months to over a year. This is due to the scale of the PPI scandal and the large numbers of cases being referred to the FOS, resulting in a backlog of claims.
Whatever the FOS decides, it is final and binding on both parties.
One major drawback of using the FOS can be the time taken to review cases. If you believe you have a strong case, supported with documentary evidence, it is worth lodging an appeal.
How to Contact the FOS
The FOS can be contacted using the following details:
Financial Ombudsman Service
South Quay Plaza
183 Marsh Wall
Telephone: 0300 123 9 123