Payment protection claim FAQs
If you are thinking about making a payment protection claim you probably have a lot of questions about the process. Below we have provided the answers to some of our most frequently answered questions.
Who can make a payment protection claim?
A payment protection claim can be made by anyone who feels they have been mis-sold a payment protection policy. The cover was frequently attached to loans, credit cards and mortgages. Your cover may be considered mis-sold if you didn’t want it, didn’t need it or couldn’t use it.
Why can people make payment protection claims?
In 2006 the FSA (Financial Services Authority) looked at the sale of payment protection policies. The regulator found some serious issues with the way the policies were sometimes sold. Over the next two years a number of large firms were fined millions of pounds in connection with these failings and the industry was warned standards must improve. These moves made way for customers who felt they had been mis-sold a policy to submit a complaint.
How much compensation will be paid?
Firstly, it is important to remember that compensation will only be paid where the lender believes failings occurred. As a general rule the lender will then give a full refund of premiums paid along with an additional 8% interest. If the payment protection was attached to an ongoing loan or credit card the compensation may sometimes be used to reduce the balance and/or any arrears.
How long will my payment protection claim take?
The timeframe for making a claim is usually dependent on the complexity of the claim. If it is a relatively straightforward case an offer could be made within eight weeks. If the complaint is more serious it could take months or even years to resolve and the Financial Ombudsman Service may have to review the case.