Have you been Plevined?

Almost certainly you’ve no idea. Recently the financial regulator, the FCA, launched a two year Payment Protection Insurance (PPI) reclaiming deadline, even getting Arnie to star in its ads. But I’ve been at the forefront of PPI reclaiming for a decade, so now I’m ‘back’ saying everyone should be asking themselves about this hidden new Plevin PPI rule.

Q. First the basics – what is PPI and this deadline?

Payment Protection Insurance - PPI - was systemically mis-sold by banks and building societies who for decades used hard sells or even lies to add it to loans, credit cards, mortgages and other forms of debt – already well over £27 billion has been paid back.

Common types of mis-selling include:

l Lied to you that you had to have PPI (it was never compulsory)

l Had PPI added without your permission

l Lied to that PPI would get you a better deal

l Given PPI when it was inappropriate such as ‘unemployment cover’ for those who were self-employed, or not being asked about pre-existing conditions that could invalidate it

It was said to cover your repayments if you lost your job or got sick, but actually at most it paid out for a year, and the maximum pay-out for some policies was actually less than it cost.

If you think you may be owed money – or haven’t a clue - don’t delay check now. You don’t need to pay a firm to find your PPI or get it back for you; you can do it for FREE. For full help see the free PPI reclaiming tool and help (including Plevin) at mse.me/ppi, plus there’s more free help at which.co.uk and fca.org.

And it’s worth doing, I’m constantly swamped with successes like Paul Smith who tweeted me: “@MartinSLewis I have seen you banging on about PPI for years. I thought I would give it a try and I got £18,000 pounds back.”

Q. You asked us, ‘Have you been Plevined’, what’s that about?

At the same time as launching the PPI deadline – a totally new category of PPI mis-selling has been introduced and it’s a total game changer. In the past, to reclaim PPI you had to have been mis-sold it. This new rules means, pretty much, if you had PPI from a bank on a product active since 2008, you’re owed some money.

It’s based on a 2014 court case brought by Susan Plevin. The court ruled as she wasn’t told about the huge amount of commission taken from her PPI payment – 71 per cent - she was mis-sold it. When banks sold PPI they received most of the policies cost in commission, which shows what a bad value product it was.

The regulator’s new Plevin rule says if more than 50 per cent of your PPI’s cost went as commission to the lender, and that wasn’t explained to you, you’re due back the extra above that.

Staggeringly the average commission banks were paid was 67 per cent and I’ve never heard of anyone who was told about it. This means millions of people who’ve had PPI, even if it was sold correctly in every other way, are due something back. On a £10,000 loan over five years, ‘Plevin’ compensation would typically be £500 and a lot more if you were mis-sold in other ways.

Q. So if I have been Plevined, what do I do?

This depends on your situation and whether you’ve tried to reclaim PPI in the past.

l Already claimed and received money. If you’ve claimed PPI on that policy in the past and got your money, you’re not getting any more with Plevin, you don’t get to double dip (yet if you’ve other policies they may still have been mis-sold’.

l Previously had a PPI claim rejected by bank or Ombudsman? If you had a bank’s policy PPI in place at some point since roughly 2008, you’re likely to be due money from Plevin. The banks have to write to 1.2 million people in this situation by the end of November. Yet there’s no need to wait, if you think you’re due, you can contact them now.

l Never claimed before. Well assuming you had PPI, first check if you were mis-sold in any other way, as if so then you get all the PPI money back, with Plevin it’s only a proportion. If you think you have been mis-sold in another way, Plevin will be looked at automatically as part of it.

If you don’t think you were mis-sold in any other way you can start a claim purely over the ‘undisclosed high commission’. For full easy step-by-step free help on starting a claim use the links above.

Martin Lewis is the founder and chair of MoneySavingExpert.com. To join the 12 million people who get his free Money Tips weekly email, go to moneysavingexpert.com/latesttip.