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ReclaimPPI.co.uk is an invaluable source of free information on how to reclaim PPI, whether you want to do this yourself or ask a company to do the work for you.

Payment Protection Insurance, or PPI, has been sold by many companies against loans, mortgages and credit cards. Sometimes people are misled into thinking that PPI is an essential part of the loan, or have found that PPI has just appeared without them asking for it. Often PPI has been sold without the salesperson checking first that the policy is suitable, and sometimes it's just so expensive that you'd never be able to get your money back, no matter how many times you were ill or out of work whilst under the policy!

Was I mis-sold? There are four main reasons why you might have been mis-sold this policy.

1. The bank said you had to have it. Sometimes banks/lenders tell you that the policy was necessary or you wouldn't get the loan. Sometimes they just didn't tell people it was optional, and sometimes they've said 'Head office won't like it, you're more likely to get the loan with it'. All of this is nonsense, and if it applies to you then your policy was mis-sold.
2. It just appeared on your loan documents without you asking for it. Often it's been added sneakily without being properly discussed. You might even have it without knowing, in which case check your loan documents or phone your lender to ask! If any of this applies, your policy was mis-sold.
3. It is unsuitable in some way. It might be unsuitable in one of three ways:
   1. Unsuitable for you. These policies rarely adequately cover the self-employed, part-time or contract worker. If you were not in employment at all or if you had a prior medical condition you thought you were covered for, or if you reach retirement age whilst the policy was active, it is likely to be unsuitable and was mis-sold.
   2. Unsuitable for the loan duration or holders. Most policies cover you for five years, yet sometimes the loan is for longer than this. If that is the case, the policy is unsuitable and was mis-sold. Sometimes the policy only covers one person even though the loan is in joint names. Again, likely to be mis-sold if this is the case.
   3. Unsuitable for the loan purpose. If your loan was a consolidation loan, (one taken out to pay off other loans or credit-cards) and you were sold a single-premium policy (paid for as a single large sum, added to the loan amount) then it is likely to have been mis-sold. These policies are so inflexible that you end up seriously out-of-pocket if you extend or reconsolidate the loan later on - so they're not suitable.
4. It was really, really expensive. Some policies on loans are so expensive that you would barely get your money back if you were to claim on it, even if you were ill or unemployed for the maximum amount of time possible. Some policies on credit-cards are so poor that they only pay enough off each month to cover the PPI itself. In either case the policy can never truly benefit you, so it was mis-sold.

When can I reclaim? If any of the mis-selling reasons apply, you can reclaim. It doesn't matter whether the loan has been paid off, or is still running. If the loan was taken out more than 6 years ago you'll probably need the paperwork as the bank may have destroyed their copy.

Should I reclaim? In these credit-crunch times, you need to consider whether you would rather have the cover the policy gives you than a refund of the PPI costs. Some policies are fair value and you might want to keep them, but most only pay out for one year if you find yourself unemployed. It's important to realise that generally they don't pay the entire loan off for you, just the monthly payments. You would usually be better off getting your money back than having one year of payments made, so check your paperwork and figure out the best option for you with a calculator!

Some sites have been saying that if you've made a successful claim on the policy you cannot also reclaim. This isn't true, you can. However, the amount of payout you receive will be reduced by any money paid to you under the policy.

How do I reclaim? You've basically got two options, either do-it-yourself or get a claims company to do it for you.