PPI: What is it and how can I claim before the deadline date?
Clock is ticking for those people yet to claim compensation from mis-selling scandal

The clock is ticking for those people yet to claim compensation from mis-sold PPI. Here is all you need to know:
What is PPI?
Payment Protection Insurance (PPI) was an insurance policy sold alongside loans, credit cards, overdrafts and mortgages designed to cover repayments in the event of loss of income following an accident, sickness of unemployment.
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Although the idea behind PPI sounds quite reasonable, "it was actually sold to thousands of people who would never have been eligible to claim using the insurance" says the Metro. It was often poorly explained to customers after being bundled into the loan or credit card they were taking out.
Finally in 2012 the courts ruled that those who had been mis-sold PPI would be eligible to claim back some of the money.
More than £43bn has been set aside by banks, building societies and credit card companies to handle claims and pay compensation, making it the UK costliest mis-selling scandal to date. So far the Financial Conduct Authority estimates just over half that amount - £27.4bn – has been paid out.
Am I eligible to claim?
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If you took out any kind of consumer loan, store card, credit card or mortgage between 1990 and 2010, "you may have been mis-sold PPI" says The Guardian. Many instances of mis-selling involve cases where the fact the insurance was optional, or excluded pre-existing medical conditions and the self-employed was not made clear to customers.
An estimated 64 million policies are believed to have been sold during the 1990s and 2000s but the latest tally complied by the FCA suggest only around 12m people have so far claimed. This means there are still millions of people who could be eligible for compensation.
On top of this, banks must now consider a new legal ruling, known as 'Plevin', about the amount of commission charged.
Explaining the impact of the new ruling, MoneySavingExpert.com founder Martin Lewis said: "Until now, you were usually only due money back from PPI if the firm had either given you an inappropriate policy, such as employment cover for the self-employed, or lied to you, like saying PPI was compulsory. Yet with Plevin, in most cases it's simply a case of 'Did you have PPI? Then you are owed money."
This means if you've ever had PPI, you were likely mis-sold and could receive money back.
How can I claim?
The first port of call is to contact your bank or loan company and ask if you were sold PPI.
If so, both Which? and MoneySavingExpert offer links to free template letters that are easy to fill in and require minimal information: usually just your PPI reference number and the name of the bank which sold you PPI. This can then be sent to the bank to start the process of claiming compensation.
Is there a deadline?
Yes. Earlier this year the Financial Conduct Authority (FCA) announced a cut-off date of 29 August 2019 for making PPI compensation claims.
The FCA has bowed to pressure from banks and businesses to set a claim deadline in an attempt to draw a line under the scandal.
FCA chief executive Andrew Bailey said: "Putting in place a deadline and campaign will mean people who were potentially mis-sold PPI will be prompted to take action rather than put it off.
"We believe that two years is a reasonable time for consumers to decide whether they wish to make a complaint."
Banks are now bracing themselves for a new wave of compensation claims after the financial regulator announced a two-year £42m advertising campaign urging customers to claim before the deadline passes.
Arnold Schwarzenegger has been recruited by the FCA to kick-start the campaign with an advert released last month that featured an animatronic model of the Hollywood star’s head encouraging people to make a complaint before the next year's deadline.
What about claiming via an external company?
The PPI scandal has seen an explosion of third-party firms promising a no-win-no-fee service and one consequence of the deadline will likely be a fresh wave of nuisance calls and texts offering to make claims for you.
"If you’re really pushed for time then there’s nothing wrong with this," says the Metro, "but remember that all those companies who cold-call you asking about PPI are in it to make money for themselves".
However, with some companies taking as much as 30% commission for processing PPI compensation claims there has been a growing backlash against an industry estimated to have made a staggering £1.5bn over the past two years.
In his column in the Daily Mirror, James Walker has repeatedly warned against what he calls "claims vultures", arguing their 'cut and paste' approach to making a complaint can actually make things worse.
"Sadly, many of the people I’ve spoken to have found themselves trapped in to contracts with claims managers who’ve done no work then threatened legal action for compensation that their customers had to obtain by themselves" he says.
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