How Far Back Can a PPI Claim Be Made?

Payment Protection Insurance (PPI) was a financial product designed to cover loan repayments during unexpected unemployment, illness, or disability. However, widespread mis-selling of PPI policies led to a significant financial scandal and extensive consumer redress programs.

Understanding Payment Protection Insurance

Payment Protection Insurance (PPI) was an insurance product commonly sold alongside various credit agreements, including personal loans, credit cards, mortgages, and car finance. It was intended to provide a means for borrowers to continue making their repayments if they encountered unforeseen circumstances that impacted their income, such as accident, sickness, or involuntary unemployment. This insurance was marketed to protect both the borrower and the lender from default.

Despite its intended purpose, PPI became problematic due to widespread mis-selling practices. Financial institutions often sold these policies to customers who were ineligible to claim, for instance, if they were self-employed, retired, or already had pre-existing medical conditions that would prevent a payout. In many instances, the terms and conditions were not adequately explained, or the policy was added to a credit agreement without the customer’s full knowledge or explicit consent. These practices led to billions in compensation, making it one of the largest financial redress exercises.

Key Claim Deadlines

Limitation periods specify the timeframe within which legal proceedings must be initiated. For many contract or tort claims, a six-year period applies from the date the cause of action arose. This period might extend to three years from when an individual became aware, or reasonably should have become aware, of the issue that gives rise to the claim.

For PPI, the Financial Conduct Authority (FCA) established a definitive deadline of August 29, 2019, for submitting new complaints to financial firms. This deadline aimed to finalize the widespread PPI mis-selling scandal, allowing financial institutions to manage liabilities and encouraging timely consumer action. After this date, the standard route for lodging new complaints directly with firms or escalating to the Financial Ombudsman Service (FOS) largely ceased.

Even if a complaint was submitted by the FCA’s deadline, time limits apply for escalating to the Financial Ombudsman Service. If dissatisfied with the firm’s final response, or if no response was received within eight weeks, the complaint needed referral to the FOS within six months of the firm’s decision. The FOS does not investigate complaints made more than six years after the event, or more than three years from when the complainant became aware, or should reasonably have become aware, of grounds for a complaint.

Assessing Your Specific Claim Period

The application of deadlines depends on “date of knowledge,” the point when a claimant became aware, or reasonably should have become aware, of their complaint’s grounds. If a financial firm sent a letter explicitly stating PPI was sold and outlining mis-selling, that communication could establish the date of knowledge, even if the policy was taken out years earlier. Proving a later date requires the claimant to provide clear evidence, as the burden of proof rests with them.

The FCA’s August 2019 deadline significantly altered new PPI complaints. For most individuals, initiating a complaint about mis-sold PPI directly with the financial firm or FOS based on general mis-selling grounds is no longer possible. The regulator communicated this deadline through public awareness campaigns, ensuring consumers had ample opportunity to act. Not being aware of the deadline is not accepted as an exceptional circumstance to bypass this cut-off.

Despite the primary deadline, the FOS may still consider complaints in exceptional circumstances. These exceptions are reserved for situations where severe personal hardship, such as serious illness or bereavement, genuinely prevented a complaint before the deadline. Such circumstances must be demonstrated and directly linked to the inability to complain timely. The FOS assesses these cases individually, looking for compelling reasons that justify the delay.

Beyond traditional mis-selling, the “Plevin” Supreme Court ruling in 2014 created another claim avenue. This ruling established that undisclosed high commission on a PPI policy could make the lender-borrower relationship unfair, even if the policy was not otherwise mis-sold. While the FCA’s deadline applied to “Plevin” complaints submitted to firms and the FOS, the ruling opened a new legal basis.

Application of limitation periods in court for “unfair relationship” claims can be complex, sometimes extending beyond the credit agreement. While direct FOS complaints are largely closed, certain legal actions through courts, not bound by the FCA’s regulatory deadline, might still be pursued, though these are more involved and costly.

Steps to Make a PPI Claim

For individuals who believe they have a valid PPI claim under exceptional circumstances or specific legal avenues, the process begins with thorough preparation. The first step involves gathering all documentation related to the PPI policy and associated credit agreement, including policy numbers, loan agreements, credit card statements, and correspondence. If original documents are unavailable, contacting the financial firm that sold the policy can help retrieve records.

Once information is compiled, contact the financial firm directly to lodge a formal complaint. This can be done by sending a detailed complaint letter or utilizing the firm’s established complaint procedure, available on their website. The firm must acknowledge the complaint promptly and provide a final response within eight weeks, outlining their decision and reasons.

If the firm’s response is unsatisfactory, or if eight weeks pass without a final decision, the complaint can be escalated to the Financial Ombudsman Service (FOS). This escalation must occur within six months of receiving the firm’s final response. The FOS assigns a case handler to investigate impartially, reviewing evidence from both consumer and firm before issuing a provisional and final decision. For claims outside the FOS’s remit, such as those initiated long after the FCA deadline without exceptional circumstances, pursuing legal action through the court system remains a possibility, though this path is more complex and may involve higher costs.