Can you still claim for mis-sold payment protection insurance?

Millions of people may be entitled to compensation for mis-sold payment protection insurance (PPI) even though the deadline for banks to consider claims has passed. 

City watchdog the Financial Conduct Authority (FCA) introduced rules on the "fair treatment" of customers in 2015 if they complained about mis-sold PPI after the regulator found "widespread poor sales practices". 

Bank customers were given until 29 August 2019 to complain and be considered for redress and more than £38 billion was paid out in compensation between 2011 and 2019. 

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Most people can no longer lodge a complaint about the product, explained MoneySavingExpert, unless you go through "legal channels or the small claims court". But law firm Harcus Parker is pursuing new cases on behalf of claimants that don’t focus on mis-selling but the "high commissions" on PPI sales that consumers didn't know about. 

Here is what you need to know to find out if you can make a claim.

What was payment protection insurance? 

PPI was designed to "cover your repayments for a time", explained the FCA, if you couldn’t repay debts such as a credit card bill or mortgage if you were ill or lost your job. 

The product, which became popular between 1990 and 2010, was sold "too widely" to consumers, added the FCA, which highlighted that it was often "poor value" and the terms and exclusions were unclear. 

The Financial Ombudsman Service said that while "not all PPI was mis-sold", you may have been entitled to redress if you didn't know you had taken it out, were pressured into buying the product or weren't eligible such as if you were self-employed. 

Can you still get compensation for mis-sold PPI?

The FCA set a deadline of 29 August 2019 for borrowers to complain about mis-sold PPI and most complaints were handled by April 2021, with £38 billion of redress paid out. 

New claims made directly to a bank are now valid only in "exceptional circumstances", said Which?, such as if you missed the deadline due to illness or a bereavement.

But "fresh legal action" could make compensation available to millions more people, said the Daily Mail. Rather than focusing on mis-selling, new claims brought by Harcus Parker allege that "banks and credit card companies secretly took huge commissions" of up to 95% that weren't covered by the FCA-backed redress scheme. 

Many individual claims have been issued in county courts since the 2019 deadline passed, added Harcus Parker, but banks and credit card companies have so far used their "financial might" to block them.  

Its argument is based on the "Plevin rule" from a 2014 court judgment that said if more than 50% of your PPI's cost went as commission to the lender and that wasn't explained, you are due compensation. This is something Harcus Parker argues that not many borrowers were aware of. 

Harcus Parker said around 350,000 people have enquired about making a claim, with the total redress estimated to be worth almost £20 billion. The claim is open to anyone who "had PPI but who has not been compensated or who has not been compensated fully" for credit agreements, added the law firm.  

Separately, the Supreme Court last week ruled against Royal Bank of Scotland (RBS), said Reuters, in a case surrounding "unfair commissions" that could "widen the number of PPI mis-selling claims faced by lenders".

The case had been going on since 2019, with RBS arguing that claims could only be brought within six years of the last PPI payment. But the Supreme Court ruled the relationship between RBS and its former customers "continued to be unfair until their credit card agreement ended", meaning the claims were brought in time. 

There is "no need" to use a claims lawyer if you want to complain as they will typically charge commissions of 20% to 25%, said The Sunday Times.  

Rather than complaining about mis-selling, you can state that the claim is based on the 2014 Plevin Supreme Court ruling on "high commissions", added the newspaper, and if the bank refuses to pay then that is the time to consider going to the small claims court or using a claims lawyer.