What is payment protection insurance (PPI) mis-selling?
From around the early 1990s UK banks, credit lenders and loan providers have commonly added payment protection insurance (PPI) automatically to their loan products and built into the loan repayment charges an amount to cover this, often without the knowledge of their customer. Although having payment protection insurance to cover your loan repayments is no bad thing, selling it to a very large number of people who would not have been able to make a claim on the policy had they got into financial difficulty is a bad thing, especially if it was done with the full knowledge of the loan provider. This constitutes mis-selling. The above applied equally to resident UK citizens and UK expatriates who took out mortgages and loans during this period.
Some payment protection insurance (PPI) claim facts
- UK expats and UK residents affected – it is estimated that some 52 – 64 million payment protection insurance (PPI) policies were sold and this makes it certain that a lot of UK expats will have had these policies prior to them leaving the UK.
- Successful claims to date – more than 13 million claimants have now received compensation although there is no data to show how many UK expats have been compensated.
- Compensation to date – information from the FCA shows that over £26 billion has been paid in compensation to affected customers but again there is no data to show how much of this money went to UK expatriates as compensation.
- Claims deadline – The financial conduct authority (FCA) of the UK, the countries regulator has set a closing date for new claims which is August 2019. It is therefore essential that any UK expats wishing to consider making a claim do so by this time.
- Average compensation – Compensation can be in a big range from just a few hundred pounds to tens of thousands. Of the claims settled to date the average payment has been around £3,000. Here are some typical examples.
These are just guidance figures but they do show the range of compensation and it should be noted that the compensation awarded is not necessarily dependant on the amount of the loan.
| Loan Type | Loan Amount | PPI Premium |
| Secured Loan | £25,000 | £12,127 |
| Unsecured Loan | £11,000 | £5,133 |
| Car Loan | £4,300 | £2,394 |
| Hire Purchase | £6,895 | £2.317 |
Question – Can UK expatriates currently living overseas have been caught up in the payment protection insurance (PPI) mis-selling scandal perpetrated by UK banks and loan providers? Yes.
Question – Can UK expatriates who have been exposed to the payment protection insurance (PPI) mis-selling scandal still claim compensation from their loan provider? Yes
Are UK expats missing out on PPI claim compensation?
At expatriates.co.uk we believe that UK expatriates are not obtaining the compensation that they deserve. We believe that where UK expatriates have been living overseas for some time that they may perhaps not be aware of recent PPI claims developments and may have forgotten that they had taken out a loan in the UK some years ago or simply thought that because they were UK expats no longer living in the UK that compensation would not be available to them.
The fact is that UK expatriates have the same rights to compensation for mis-sold payment protection insurance (PPI) policies as do UK citizens residing in the UK and the financial services ombudsman service will rule for UK expatriates in exactly the same way as they do for everyone else.
Options For Making a PPI Claim For UK expatriates
Making a claim directly
It has been well publicised by the UKs financial conduct authority (FCA) that claimants making claims directly to their lender should obtain the same success rates as people who pass their case to a specialist claims firm to handle on their behalf. This assumes however that as an UK expatriate that you will be able to carry out the research required and have sufficient information available to put your claim together in a sound manner. Should you make a claim and find your claim has been unreasonably rejected by your lender then as a UK expatriate you have the right to refer your claim to the UKs financial services ombudsman who will look at your case and decide if you are due compensation. If your claim is successful you will receive the full amount of compensation without deduction of fees and charges.
If you do hove the information to hand to let you go ahead by yourself you may find the lender telling you that claims can only go back 6 years. Whilst this is the correct length of time under the data protection act to provide and maintain records on behalf of clients, in relation to payment protection insurance and mis-selling, the vast majority of lenders will have records that go back for a great deal longer than that.
The procedure to follow as a UK expatriate making your claim, as advised by the UKs financial services authority (FCA) is as follows.
- Step 1 – Locate all of the relevant documents associated with the original loan and the payment protection insurance (PPI) policy and make copies of them. This should include anything that shows that you have taken out a payment protection insurance (PPI) policy and shows you making payments for it. If you’re not sure if something is relevant, copy it anyway.
- Step 2 – Write a letter to the mortgage, loan or credit card provider who sold you the payment protection insurance (PPI) policy. Some banks have a questionnaire you can complete on their websites which may simplify this. When you have gathered everything together that you think might be relevant, send it to your PPI provider with your letter, which should include at least the following:
- Personal details – you should ensure you include your full name, address and contact details including your date of birth.
- Policy information – you will need to give information on the following
- PPI policy number – This will be shown on the policy document
- Date when you bought the PPI policy – this may be a different date to when you bought the credit facility.
- Date when you bought the credit facility – note that the loan may have been taken out before the payment protection insurance (PPI) policy was put in place.
- Your personal circumstances – you should provide information on your personal circumstances at the time you bought the PPI policy. This should include you employment situation and other related financial information as what you say here will help to identify if you should have had a payment protection insurance (PPI) policy in the first place.
- Reason for your complaint – It will help your case if you can provide a brief explanation of the reasons why you are making a complaint
You should receive a response from the provider within about 8 weeks, giving you their decision on your claim. If they accept your claim as reasonable they may make you an offer of compensation to settle matters. If you are happy with the settlement then the matter will be closed.
However, should your provider fail to respond to you within this timescale or if you are unhappy with your providers decision or the level of compensation offered then you should move to stage 3.
- Step 3 – if you do not receive a satisfactory response from your provider then you should lodge your complaint with the Financial Ombudsman Service (FOS). The Ombudsman will ask you to fill out a questionnaire which will help them to decide whether or not you’ve been mis-sold your payment protection insurance (PPI) policy. The ombudsman has the power to award you compensation if they uphold your claim.
Using a specialist claims management firm
Specialist claim firms have first class knowledge of the procedures involved and also have the ability and knowhow to obtain information about your payment protection insurance (PPI) policy even when you no longer hold any paperwork on the policy. Often they can identify policies that you have had when you cannot remember having them yourself. For these reasons, if you are unsure of whether you had a payment protection (PPI) policy or don’t have the paperwork to hand anymore, then using a specialist claims company to act for you could be a good way forward. As an expatriate living outside the UK, using a specialist claims company may have its advantages.
Remember though that specialist claims companies usually work on a no win, no fee basis so there are no costs to you should your claim fail. If your claim is successful then your, no win no fee claims firm will withhold a percentage of the settlement amount to cover their costs and provide them with a profit for their services. You must make sure that you establish from the outset, the terms offered by your claims firm.
Types of loans and products that could have PPI included
- General unsecured loans – these could be for a whole range of things including loans for business purposes but by far the majority were where people took out personal unsecured loans for more modest amounts.
- Credit Cards – most people have now been using credit cards for many years and this includes all forms of credit cards. Where people did have credit card facilities, certainly in the 1980s and 1990s with some of the more obscure card providers which were of course underwritten by the major High Street Banks, then these are the prime candidates for refunds for payment protection insurance (PPI) policy mis-selling.
- UK Mortgages and expat mortgages – since the 1990s, mortgages were commonly sold with payment protection insurance (PPI) included with the premiums.
- Secured Loans – These are loans that are often taken out for quite large sums and usually secured against your property. In the same way as for mortgages, payment protection insurance could invariably have been applied to it. Sometimes the payment protection insurance (PPI) did not even cover the full terms of the loan.
- Current Accounts – Some of the Lenders applied payment protection insurance to their own personal current account facilities although this was not widespread. However some banks allowed customers to run up overdrafts on their current accounts and then re-financed that debt by way of a personal loan. This would then invariably have payment protection insurance attached to it.
- Hire Purchase agreements – these are not so common nowadays with the growth in credit cards but earlier they were commonly used and payment protection insurance (PPI) could have been attached to them.
- Car loans – The car finance companies commonly used payment protection insurance when offering loans to their clients.
As can be seen from this small selection of examples, applying payment protection insurance to all forms of loans was widespread and may have applied to you in cases that you would not to have thought it could exist.
If you think you may have had payment protection insurance (PPI) on a loan, credit card, mortgage, store card or catalogue accoint and would like to find out where you stand; Start your PPI claim with a PPI check today