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Time to reclaim mis-sold insurance

    Billions of pounds are sitting waiting for millions of people who have been unknowingly shafted by their banks on credit cards and loans: roughly £1,500 per person.

    Having given up defending their disgusting mis-selling of Payment Protection Insurance (PPI) last month, banks have now 'provisioned' enormous sums, waiting to be paid out in compensation.

    Millions do not know they are entitled to this cash. And while banks must process existing complaints and contact some who are unaware they have been mis-sold, they don't need to contact everyone. So best to assume you won't be contacted and do it yourself. It is really easy to do and I am frustrated that many are unnecessarily using claims companies. There is no need.

    I have been swamped with questions on PPI, so here are the answers:

    ● Is PPI always bad?

    PPI is an insurance policy that covers your repayments, usually for up to a year, in the event of accident or sickness. In itself, it can be a good policy. Yet banks sold massively over-expensive policies, pushing them too hard to too many - often worthless to those who got them. Don't let that put you off getting the insurance, just don't think you need get it from your bank.

    ● Am I affected?

    It could be anyone who has or had a loan, store card or credit card that was active within the past six years. Check documents now to see if you have PPI; one form of mis-selling was adding it without telling you (and hiding its cost within the loan). It doesn't matter if the loan is paid off or you are insolvent. If you were mis-sold, you can reclaim.

    ● What counts as mis-selling?

    Not all PPI was mis-sold, but an enormous number of bank-sold policies were. The key is that the lender needed to ensure the policy was appropriate for you at the time you took it out.

    Some of the big mis-selling categories are: banks lying that the policy was compulsory or you needed to get it to get the cheap rate; giving people employment cover when they were self-employed and; not asking about pre-existing medical conditions, so they couldn't inform you that these were excluded.

    ● How can I reclaim?

    Send a written complaint now. Free template letters, a full detailed mis-selling checklist and how to appeal for free if you get rejected are at www.moneysavingexpert.com/ppi or, for those with credit cards, www.moneysavingexpert.com/CCPPI. Other campaigning organisations such as Which? also have free help resources.

    ● How far back can I claim?

    As long as the loan or credit card was active in the past six years, you can claim. So a loan from 2000, repaid in 2006, counts. In rare cases, you may be able to go back further.

    ● The loan/card is paid off but I can't remember who it was with?

    The easy way is to get copies of your credit reports from the credit reference agencies www.equifax.co.uk or www.experian.co.uk, which you can do speedily for £2.

    ● I have no paperwork. What can I do?

    PPIs are often listed on your credit agreement. Under the Consumer Credit Act, you can apply for a copy for £1. Then just look for mentions of the insurance. If it is not on your agreement, under the Data Protection Act, for £10, you can ask for all info on you.

    ● How much could I be due?

    On a £5,000 loan over five years, PPI typically cost £1,000 and if mis-sold, you would be entitled to it all back plus interest. Yet many credit card holders with big debts or secured loan holders get much more.

    ● I have had a PPI reclaim rejected, Can I try again?

    If you were mis-sold, complained, had it rejected but did not appeal to the Ombudsman, you can start a fresh complaint back at the bank or lender.

    The banks we spoke to confirmed they will hear re-started complaints.

    ● Does it vary by bank or card company?

    There are no good guys here but some banks were worse than others.

    The scale of the cash they have put aside to pay this is a very good indication. See the table below.

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