Credit Card PPI Claims
What Is Credit Card PPI?
Around 10 million people in the UK were sold Payment Protection Insurance (PPI), or it was added to a credit card between 1988 and 2011. The PPI was to ensure card payments were met if you couldn’t work due to sickness, an accident or being unemployed.
However, in many instances it was mis-sold as an added extra which people didn’t want or ever need. Customers were not told that if a claim on the insurance was necessary the maximum time it would pay out would be 12 months. Many would also face problems in trying to make a claim due to the number of exclusions on the PPI which would prevent customers in making a successful claim.
A survey by the consumer group Which? indicated that almost 1.5 million people were sold PPI with their credit card after sales staff mis-led them. As a result of this, huge numbers of people are entitled to reclaim mis-sold PPI on credit cards
If you think you were possibly mis-sold PPI on a credit card, get a PPI check done to find out for sure. It doesn't matter if the PPI policy is active or not.
Lenders Who Sold PPI with Credit Cards
Most high street banks and other credit card providers sold or added PPI to credit cards. The following is a list of popular credit cards PPI was sold with or attached to:
- Bank of Scotland
- Capital One
- Clydesdale Bank
- Halifax Bank
- Lloyds Bank
- Lloyds TSB
- Royal Bank of Scotland (RBS)
- Yorkshire Bank
The above is not a complete list of credit card lenders who sold PPI. If you dealt with a firm not listed above or in the lender pages, please contact us for further assistance.
What Are Credit Card PPI Charges & Costs?
Credit card PPI is paid by you when the lender charges a premium each month. The cost is made up of three sums, which combined makes up the total cost of credit card PPI.
The three parts consist of:
- PPI premiums on credit cards are worked out as a percentage of the amount outstanding on the credit card each month. Typical charges by lenders can be up to 79p for PPI on every £100 of debt on the credit card.
- Interest is charged in addition to the monthly credit card PPI premium, the rate of which is the same that is charged for the outstanding balance on the credit card if PPI had not been added.
- If payments have been missed, further charges may be incurred to the credit card account. If PPI has been added to the account, the charges will be higher than if PPI wasn’t added to the account, leaving the account holder with a bigger debt.
The above illustration shows that the amount of PPI stated by a lender on a credit card is the first part of working out the PPI cost. The reason is that when the PPI premium is added to the outstanding balance on the credit card, it increases the cost of PPI substantially. This is due to outstanding balances on credit cards incurring interest rates of over 15% on top of what lenders would charge for credit card interest.
A report published by the Citizens Advice Bureau (CAB) in 2005 titled 'Protection Racket' highlighted concerns the CAB had in relation to PPI and how it was sold.
The report identified PPI policies offered by some of the UK's largest credit card lenders only paid out for 12 months maximum if the policy were needed by the policyholder due to unemployment.
The monthly benefit received from the PPI policy would only cover a maximum of 10% of the outstanding balance.
This crucial information was not being passed on to customers when the PPI was being sold with their credit cards and in many cases, customers were not aware of what they were buying. Some later found that they had PPI but were completely unaware that it had been added.
How Credit Card PPI Was Mis-sold
PPI has been widely mis-sold across the financial services industry. PPI was added to and sold with credit cards without any checks to establish if PPI was suitable for the customer, if they were eligible under the provisions of the PPI, if the cover was required or even wanted.
Grounds for PPI Mis-selling
There are several ways in which credit card PPI may have been mis-sold to you:
- You were unaware that you were being sold credit card PPI;
- You felt under pressure to take out the credit card PPI in order to be approved for the credit;
- The lender did not check if any of the exclusions applied that would make it impossible to claim on credit card PPI policy;
- You were led to believe that the credit card PPI purchase was compulsory and not an optional extra at the point of sale;
- Your employment already provided you with this type of cover or you had another PPI policy in place;
- If your age at the time of taking out the credit card PPI was past retirement you would not qualify for the PPI;
- At the time of taking out the credit card PPI you were self-employed, unemployed or retired;
- Any pre-existing medical conditions you had were not considered at the time of taking out the credit card PPI;
- No information was provided to you about your right to cancel the credit card PPI policy.
Don’t Recall Which Credit Card Provider You Used?
Trying to remember the different credit card providers used over time can be difficult, but it doesn’t mean you can’t still check for mis-sold PPI or put a claim in.
There are many cases where people cannot remember which providers they have used, mainly because of how long ago it was or the number of lenders they’ve used over time.
Looking for any paperwork relating to past loans will help to identify lenders and determine if you had PPI or not. If you don’t have any documentation, we may be able to help in trying to identify your past lenders.
How Much Will I Get If My Credit Card PPI Claim Is Upheld?
If your credit card PPI claim is successful, the amount you are compensated by will consider the following:
- How much PPI you paid per month;
- The amount of interest added on top of the PPI;
- Any charges for missed payments or arrears that could have affected the cost of the PPI.
When the above facts have been assessed and the amount to be refunded has been calculated, an additional sum for statutory interest at 8% should be also added. This will make up the total amount payable for mis-sold PPI.
High Commission Claims & Plevin
The Financial Conduct Authority (FCA) in August 2017 introduced a new ruling for PPI mis-selling called ‘Plevin’. Under this ruling, anyone who had PPI from a bank or lender attached to an active finance product since 2008 may be owed some money. In the past, in order to reclaim any PPI, you had to have been mis-sold it. The FCA’s new rule says if over 50% of your PPI cost went as commission to the lender, and that wasn’t explained to you, you can claim back the extra above that.
Following the ruling, the FCA set out guidelines that defined high commission as being more than 50% of the cost of the PPI premium and further stated how banks should investigate and correct PPI commission.
The Plevin ruling will not apply to everyone for example if as a result of a previous claim, you’ve already received a PPI refund, you cannot now claim for unfair commission.
If you have already raised a previous complaint for mis-sold PPI which was not upheld, you may be able to claim about the commission charged on your PPI policy. You may be eligible if the any of the following apply:
- the credit card with the PPI was sold to you on or after 6 April 2007; or
- the credit card with the PPI was sold to you before 6 April 2007 and was still in effect on or after 6 April 2008.
How Long Do I Have To Make A Credit Card PPI Claim?
The FCA has set a deadline of 29 August 2019 by when all claims for mis-sold PPI need to be submitted.
This means that your mis-sold credit card PPI claim must be submitted before this date. New claims cannot be lodged after this date.
There may also be other time limits to considers, so act now and put in your credit card PPI complaint as soon as possible.
Frequently Asked Questions on Credit Card PPI Claims
Read our frequently asked PPI claims related questions and answers. In the majority of cases the first step to making a PPI claim is to get a PPI check done with the lender.
Other Organisations That Can Offer Help and Advice on Credit Card PPI
There are some regulatory bodies who can offer information and assistance regarding PPI: The Financial Conduct Authority, the Financial Ombudsman Service and the Financial Services Compensation Scheme.
Financial Conduct Authority (FCA)
12 Endeavour Square
Tel: 0800 101 8800
The FCA are the finance industry regulator in the UK. They ensure customers are treated fairly by financial services organisations, that include banks, credit card companies, loan companies and building societies.
Individual mis-sold credit card PPI complaints are not dealt with by the FCA, but they can provide general PPI information. Contact the PPI provider directly, all regulated companies have procedures in place to deal with PPI complaints.
If your claim has been rejected by your provider the matter can be referred to the Financial Ombudsman Service (FOS). They can look into the matter and give you their decision.
Financial Ombudsman Service (FOS)
Tel: 0800 023 4567
The FOS deals with complaints and disputes made by customers of UK banks, building societies, insurance companies and other financial services organisations including advisers.
For the FOS to look into your credit card PPI complaint you will need to have contacted the organisation concerned and allowed them to put the matter right. If you’re not happy with the organisation’s response or lack or response, only then can the FOS get involved. However, you will need to contact the FOS within 6 months after receiving the final response from the organisation concerned for them to be able to investigate the matter.
Financial Services Compensation Scheme (FSCS)
PO Box 300
Tel: 0800 678 1100
The FSCS is there to protect customers in the event of an authorised financial services organisation fails i.e. firms that are authorised by the FCA and the Prudential Regulation Authority.
If the organisation you are dealing with has gone out of business, cannot pay the claims made against it or has been declared in default, the FSCS can make an award of compensation. The award will only be a maximum of 90% of the loan PPI claim where there has been actual financial loss.
Credit card providers Facing Mis-sold PPI Queries
The following is a list of credit card companies who are known to have sold PPI. Please note this is not an exhaustive list.