Lloyds ‘£100m fine': Here's how to claim your money back
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Loading... - SUTH INTHUVARMAN
- 04 Jun 2020
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Lloyds Banking Group will reportedly be handed a fine of over £100million by the City watchdog for failing to handle PPI complaints properly.
Sky News reports that the Financial Conduct Authority (FCA) has reached a settlement with Lloyds, which is accused of mis-selling payment protection insurance (PPI) as well as mis-handling complaints, and which has already set aside more than £12bn to deal with compensation claims from customers.
But how do you make a claim?
What is PPI and how was it mishandled?
Payment protection insurance, or PPI, is cover for borrowers who find themselves unable to pay back their loans or credit card payments due to a sudden loss of income – if you fall ill or lose your job, for example.
Banks have been accused of mishandling PPI by not telling borrowers what exactly was covered by the policy, telling them that PPI was compulsory or adding PPI without consent.
How do I know if I have a case?
Assuming you’ve checked your policy and have PPI on your account, you need to establish if you were mis-sold the cover in the first instance.
- Were you told it was compulsory?
- PPI is not compuslory. Most major providers subscribe to the Lending Code (check here), which states that they won’t force customers to purchase insurance.
- Was cover added without your knowledge?
- Some old agreements (pre-July 2007) used an ‘opt out rather than opt in’ system, so this is worth checking.
- Were you told or sold the wrong thing?
- Perhaps you were already covered, the insurance was a different length to the one to which you agreed, or you thought it was a joint policy.
- Were you self-employed, unemployed or retired at the time of starting the policy?
- If you were unemployed or retired when you began the policy, the unemployment cover is worth nothing and this should have been stated explicitly by the provider. If you were self-employed, you may not have been covered if your business went under. This too should have been stated explicitly.
- Have you had medical problems in the past?
- The majority of PPI policies exclude existing medical conditions, and this should have been pointed out by your provider.
- Has your policy provider already been fined?
- A number of major providers have now been fined for mis-selling policies or mishandling claims. If your provider has, it is worth taking a look at your policy.
The process can be long, but the payouts can be big (Picture: Giphy)
I think I have a case. What next?
If you have considered the above and believe you have a case, the next step is to contact your lender. Phone or write to the company that provided you with the policy and ask for a refund.
Some companies, such as Barclays, have a PPI portal you can use if you bank online. MoneySavingExpert has provided a list of contact details for the major PPI providers as well as questionnaires and templates if you choose to send your bank a letter.
What if my provider says I don’t have a case?
If your bank rejects your claim, that doesn’t necessarily mean you don’t have a case. Irrespective of that, in order to go to the Financial Ombudsman you need to have written directly to your lender first.
What if my provider makes me an offer?
If your bank accepts you have a claim and makes you an offer, take a step back and consider it. You may have been underpaid. This is the basis of the allegations against Lloyds.
Consider any offer your provider makes you (Picture: Getty Images)
What if I’m still not satisfied?
If you are still unsatisfied at this point, you’ll have to make a formal complaint to the Financial Ombudsman Service, which is an independent body put in place to settle disputes between financial companies and their customers. Their website can be found here. You can also call 0800 0234 567 from a landline, or 0300 123 9123 from a mobile.
The decision process is long – some complaints can take 12 months or longer to settle – but in the last few years around 65 percent of cases ended in the consumers’ favour and the payout you receive could be huge.
Finally, if you believe the assigned adjudicator at the Ombudsman Service made the wrong decision, you can ask for an official ombudsman to make a formal decision, or you can take the company to court.
There is no deadline for making a claim, but with over £17billion already paid out in compensation, the industry is pushing for a cut-off point for making claims.
In other words if you are considering making a claim, do it sooner rather than later.
