PPI on Mortgages: The Countdown Is on for Consumers

It’s now less than a year until the PPI deadline. Yet, it is believed that thousands, if not millions, of people are still eligible to claim for PPI. PPI was widely mis-sold on credit cards, loans and mortgages.

To date, the banks have paid nearly £32 billion to consumers. Despite this high figure, the banks are still putting aside even more money to compensate customers, suggesting that there is billions more to be paid out before the deadline.

Those who wish to reclaim PPI on their mortgage could receive a large sum of money from their bank, with lengthy repayments on mortgages meaning that some consumers could have paid PPI for a number of years.

PPI wasn’t necessarily a bad purchase when getting a mortgage. It was useful insurance to have in the case of sickness or redundancy. However, the banks realised that it was a lucrative product and forced employees to sell the insurance by any means, often by omitting the finer details or telling consumers that it was compulsory. This resulted in many consuming being forced to buy the insurance, even when they weren’t eligible.

Property owners and landlords should check if they were mis-sold PPI. It was most commonly mis-sold during the 1990s and early 2000s. All claims need to be made to the appropriate lenders before 29th August 2019, the date selected by the Financial Conduct Authority as the deadline for individuals to make a claim to their bank or lender.

The Cost of PPI on Mortgages

A PPI policy was paid for either upfront or in monthly instalments. For some people, this could have amounted to a very large figure. The higher the amount paid for PPI, the greater the payout from the bank will be. If you paid PPI before April 1993, your refund amount will be higher, as statutory interest before this date was 15%. Any PPI bought after this date has an interest rate of 8%.

A PPI refund consists of a refund of the policy amount, plus any interest paid on the policy and statutory interest. For many consumers, the outcome has been a four-figure sum.

How Consumers Can Claim PPI on Mortgages before the Deadline

The problem with many mortgages is that the debt may have been settled a number of years ago. If consumers can’t remember the lender or no longer have the paperwork from the mortgage agreement, making a claim can be much more difficult. However, it’s not impossible.

A credit report can show any active accounts within the past six years, but won’t give any indication of PPI. Still, it can be useful if you don’t remember your lender.

Without the relevant paperwork, consumers need to either contact a PPI claims company, the lender (which may not have a record of it if was settled over six years ago), or a solicitor. Once PPI has been uncovered, consumers can make a claim to the relevant bank, but the claim must state how the PPI was mis-sold. For some, it was added without their knowledge — this is why so many people have been surprised that they were entitled to a PPI refund.

Those wishing to find out if they had PPI on their mortgage should act soon to ensure that they make a claim before the August 2019 deadline. Whether you use a PPI claims company or do it yourself, the payout is more than worthwhile.