Payment Protection Insurance Mis-Selling Checklist

Have you taken out a Car Loans, Home improvement loans, Secured Loans and even personal Loans. It doesn’t mattet if the loan is current or previously redeemed.

If you have already tried to claim and been refused by your lender it doesn’t matter. You will be taken much more seriously if you use a professional service.

It doesn’t matter if you win or lose (which is unlikely). You pay no fees to make a claim. Research now shows that up to 90% of policies sold in the UK are useless. Many people when trying to claim on their PPI are told that they are not eligible to make a claim on these policies.

It is estimated that over 20 million people in the UK have been mis-sold a payment protection policy, some might not know they even have one. Recent changes in the consumer credit act has forced companies to issue at the very least, annual financial statements. If you have never recei ved a financial statement from your lender then chances are you have no idea how much you actually owe.

The sale of Single Premium Payment Protection Policies, insurance to your loan in one lump sum, has recently been BANNED at the point of taking out the loan. If you have one of these policies then chances are it was mis -sold and you are paying for something in which you will never likely be able to make a claim on.

Mis-selling checklist

1. Were you told the policy was compulsory?
2. You were told the insurance was essential for you to get the loan
3. Where you asked if you had another policy or insurance in place that would cover you?
4. The terms & conditions of the loan insurance policy were not fully explained to you.
5. You felt under pressure to take out the loan insurance
6. Where you informed that alternative and cheaper insurance products were available to you?
7. Did the adviser tell you about any significant exclusions under the policy – for example, the exclusion that says you won’t be covered for any pre-existing medical condition?
8. If you took out a loan or finance agreement, did the adviser make it clear that you would have to pay for the insurance up front in one single payment?
9. If you had to pay for the PPI as a single payment, did the adviser make it clear that the insurance cost would be added to the loan and you would be paying interest on it?
10. Single premium PPI insurance normally lasts for 5 years. If your loan or finance agreement was for longer than this, did the adviser make it clear that the insurance would run out before you had finished paying for your loan or finance agreement? The adviser should also have told you that you would continue to pay interest on the insurance premium, even after the insurance expired.
11. You were under 18 or over 65
12. You worked less than 16 hours a week
13. You were employed on a temporary or contract basis or were aware you may become unemployed
14. You suffered from stress, backache or had a pre-existing illness or injury
15. You were not told about the true cost of the insurance, (or not told you were buying it at all).
16. You were not asked about any other insurances you had
17. You were not told that the same policy could potentially be bought elsewhere cheaper.
18. You paid for loan insurance upfront and it was not refunded to you when you paid back your loan early.

If any of the above apply to you why not claim back your ppi premiums now? You could receive thousands of pounds back.

If you still need PPI you can shop around and buy it cheaper elsewhere ……………..and read the small print and exclusions first!

DE-PRESSURISING PAYMENT PROTECTION

Fined PPI Providers Add Weight to Your case for a Refund

If you have ever tried to claim on a payment protection insurande policy when you became ill or unemployed you will know it is practically impossible to do. There are so many exclusions and omissions and hidden clauses that hardly anyone could possibly make a succesful claim. And that is the way they were designed. It is not surprising then that providers have been heavily fined.

Several major banks and lenders, including Alliance & Leicester, Egg and Capital One have been fined for “not treating customers fairly”, and more are added every day. The regulator, the FSA, has said it wants to see better practice and has fined several companies for failing to treat their customers fairly. More fines, which could be for up to £1 million, are expected.

Who’s been fined?
* Capital One: Fined £175,000 in February 2007 for failing to ensure that 50,000 customers buying credit cards and loans between January 2005 and April 2006 received important information about the policy.
* GE Capital Bank Ltd: (supplies cards for Asda, Comet, Debenhams and Topshop among others): Fined £610,000 in January 2007 for inappropriate sales of its store cards and credit cards.

* Redcats: Fined £270,000 in December 2006 for also not having adequate systems and controls in place to minimise the risk of unsuitable sales.

* Egg: Fined £721,000 in Dec 2008 for serious failings in its credit card PPI sales by telephone between Jan 05 and Dec 07. Egg has said it will be writing to customers, asking them to call a dedicated number if they are concerned they were mis-sold PPI, and will compensate where appropriate.
* Alliance and Leicester (A&L): Fined £7 million, the highest fine to date by far, in Oct 2008 for serious failings in its PPI telephone sales between Jan 05 and Dec 07. A&L has said it will be writing to all the customers concerned.

* 5 motor retailers: GK Group Limited, George White Motors Limited, Ringways Garages (Leeds) Limited, Ringways Garages (Doncaster) Limited and Park’s of Hamilton (Holdings) Limited were fined a total of more than £175,000 in Aug 2008 for exposing a total of 2,175 customers to the risk of being sold unsuitable PPI policies.* Liverpool Victoria: Fined £840,000 in July 2008 for serious failings in the sale of single premium PPI on telephone loans sold between 14 January 2005 and 8 August 2007. It has also agreed to compensate customers if their policy is not appropriate and to refund interest automatically.* Land of Leather Ltd: Fined £210,000 in May 2008 for allowing its sales force to sell PPI, between May 2006 and Feb 2007, without effective monitoring or training.* HFC Bank, also trading as “Household Bank” and “Beneficial Finance”: Fined £1,085,000 in January 2008 for putting customers at an unacceptable risk of being sold PPI when it was not suitable for them. Failings took place in branches between Jan 2005 and May 2007.
* Regency Mortgage Corporation: Fined £56,000 in December 2006 for not collecting sufficient information during a PPI sale to ensure its recommendations met customers’ demands and needs.
* Loans.co.uk: Fined £455,000 in October 2006 for not having appropriate systems and controls to minimise the risk of unsuitable sales.

If you are a customer of one of these companies it may have already been in touch with you, but if it hasn’t you should definitely send a asking for justification that your policy was sold with your best interests in mind. Other companies are likely to be fined too. The FSA is likely to announce further fines, this is important as it hugely strengthens your claim for a refund of your payment protection insurance policy.

What is Payment Protection Insurance?

Have you ever borrowed money in the form of credit cards, a loan or a mortgage? If so you may have been sold Personal Protection Insurance (PPI) and you could be owed thousands of pounds in compensation. Payment Protection Insurance protects a borrower’s ability to maintain repayments and helps them avoid getting into debt should they be unable to keep up their repayments due to accident, sickness or unemployment. Payment Protection Insurance is also known as: Accident, Sickness, Unemployment Cover; Redundancy Protection; Loan Protection and Mortgage Payment Cover.

Policies are available to protect most forms of personal credit, including mortgages, personal loans and credit card repayments. Cover is often purchased at the time the finance arrangement is made, but may be available at a later date or taken out as a stand-alone policy.

The Financial Services Authority recently carried out an investigation into the selling of PPI. They found that tens of thousands of people could have received bad advice and are therefore able to claim compensation. If you have or are borrowing money for any of the following reasons then you may have PPI and could be owed thousands of pounds in compensation:

• Consolidation loan
• Loan for a car
• Credit cards
• Personal loan
• Mortgage

Of course, PPI could be very beneficial, but if you are not careful, it can also be very expensive. Inevitably, there is also the usual list of exclusions to look out for. For example:

• Consumers must not be aware of impending unemployment
• Policies do not usually cover unemployment occurring within an initial period of time
• Policies exclude claims arising from pre-existing medical conditions
• Claims that result from your own actions will not be covered.

Like thousands of others, you may have been given bad advice. Were you told about the costs, exclusions, charges or alternative (potentially cheaper) products available to you?
Even better, it will not normally cost you anything in front fees to find out how much you are owed.

That’s because most claims companies operate a no win – no fee service, so you only pay a percentage of anything they claim back. If they don’t claim back anything, and then you don’t pay anything!

How do I know if I’ve been missold Loan Insurance / PPI?

The Financial Services Authority (FSA) has published strict rules for the financial services industry which your financial advisor must follow.

To help you further, here are just a few of the reasons why you may have received bad advice.

• You were told you had to have PPI to get the loan
• You were pressured into buying PPI by a pushy sales person
• You were told PPI would improve your chances of securing a loan
• The small print of the contract was not fully explained to you
• The cost of PPI was not fully explained to you
• You were not told that PPI was included in your credit agreement

THE LIST GOES ON……………Claim NOW! Call 0845 475 5435
Accident, Sickness, Unemployment Protection, Redundancy Protection Cover

Accident, sickness, unemployment and redundancy payment cover are similar types of PPI or payment protection insurance sold alongside loans or mortgages.

What will happen if I lose my job or become ill? How will I cover my costs?

Faced with these concerns, taking out accident, sickness and unemployment (ASU) cover or other income protection seems to make perfect sense. This kind of cover typically gives you a monthly tax free income should you be unable to work.

That’s the theory. The reality can be different. As too many people are discovering, these expensive payment protection policies often don’t pay out a penny when the going gets tough. In fact, they invariably add to our financial burdens rather than provide us with a safety net.

The small print in policies documents often contains numerous exclusion clauses. The income protection policies are invalid if, for example, you have a pre-existing medical condition. Stress and back problems are frequently not covered. Recurring conditions are excluded. Self-employed people often have to stop trading completely in order to make a claim.
Loan Payment Protection

Personal Loan Protection (PLP), including secured loan insurance and unsecured loan insurance, is one of the most common forms of payment protection. It’s also one of the most expensive.

This kind of loan payment protection can be sold with just about any loan. Secured loan insurance is tied to an asset, usually your home. Unsecured loan insurance does not require this kind of security.

You might have purchased loan payment protection when you signed up for a loan to buy a kitchen or a car or to consolidate your debts. You could also have purchased it as credit card payment protection when you applied for a credit card. You might not even know you have Personal Loan Protection (PLP) insurance but be paying for it all the same.

This kind of cover can add a staggering amount to the total size of your debt. Moneyfacts data has looked at hundreds of cases and revealed the astonishing cost of loan payment protection. On one loan of £5,000, for example, the payment protection insurance premiums totalled £1,300 – over 20% of the total loan.

So should you have looked more closely at the terms and conditions? Not necessarily. If the costs of PLP were not made clear to you when you took out your loan, you may have a claim for mis-sold loan protection.
Were you Mis-Sold?

These are just a few examples of how your policy may have been mis-sold:

* You were told you had to have PPI to get the loan
* You were pressured into buying PPI by a pushy sales person
* You had medical problems in the past
* You were not told that PPI was included in your financial product
* You were self-employed, unemployed, redundant or retired at the time

PPI Exposed! Claim it all back.

Why is Payment Protection Insurance so often mis-sold?It is highly profitable. Simple!

Most of the profit from selling loans, mortgages and other credit finance agreements doesn’t come from the products themselves, but from the payment protection insurance sold alongside. There are around 20 million PPI policies in the UK, generating over 5 billion pounds a year for the companies involved. Did you know it isn’t the insurer that reaps most of the reward? It’s the company selling the loan, credit cards or finance agreement. The cost of the insurance almost always makes the interest cost look small. So it is not surprising many believe this is the most over-priced financial product around.

Worse still in Jun 08, after a 15 month investigation into PPI, the Competition Commission found the following average insurance payout ratios apply:

• Car Insurance: 78%
• Home Insurance: 54%
• Mortgage PPI: 28%
• Personal Loan PPI: 15%
• Credit Card PPI: 11%

This means that for every £100 insurers charge for car insurance they pay out £78, on credit card PPI its just £11, meaning it is hugely profitable. Yet most of this profit goes to the lenders, not the insurance companies.

The only silver lining to all this is it means mis-selling cases are easy as it is well recognized that it is mis-selling and the good news is that you can get your money back. There have been thousands of success reports and many more still due.

Have you been mis-sold?

If you have received a payout from the insurance, you won’t be able to say the policy was mi-sold.

If possible get hold of a copy of your policy’s terms and conditions. If you can’t find them, contact your lender to ask for a copy (but make sure it dates back to the time of your agreement as terms will change over time). Lenders can ask for £10 to provide this but not all do so you could include a cheque for £10 (don’t send cash though) to speed it up a little. The sellers of PPI have a responsibility to ensure that you understand the nature of the product and that it is appropriate for you. All polices will have certain exclusions and you should have been told about them. As most policies are bought with a loan or credit card rather than standalone the key thing is. What was said at the point when you were sold the product?

The following are the key mis-selling categories and if you fit one or more of these you probably have a case but it is best to check with your claims management company first.

Call 0845 475 5435 NOW to see if you have a claim.

Were you told or sold the wrong thing?

This covers anything from being told the insurance was compulsory, to not knowing you had even purchased PPI, to the fact you were already covered through work or your partner. It also applies if the policy isn’t what you agreed to, you got store card cover in a shop and it wasn’t explained or you didn’t realise it’s a joint policy but only in one person’s name.

Lenders selling PPI polices are obliged to tell you about the specific criteria of the policy and to confirm it’s the right product for you. However, because PPI polices earn providers a high proportion of profit, staff are often highly encouraged to sell as many as possible, and are well remunerated for doing so, meaning mis-selling is rife.

When you contact a lender by phone or in person if they don’t give you fair, correct and reasonable information it’s likely you were mis-sold. Due to the volume of complaints, the regulators are now hot on the heels of this issue.

Some common examples of PPI mis-selling

Were you told insurance was compulsory?

It’s a common complaint that consumers are told they must buy a policy from the same provider as the loan or credit card to be accepted for the product. Any company that subscribes to the banking code agrees it will not insist that you buy an insurance product from them, so although it can request that you have PPI from somewhere, it does not have to be from them.

Therefore if the salesperson:

• didn’t make it clear the policy was optional,
• implied or stated the loan would be more expensive if you didn’t take the insurance,
• implied or insisted you take out their policy to qualify for the product or help with your application,
• was very pushy when selling the product so that you felt you could not say no,
• would not let you continue with the loan application if you did not sign the insurance agreement as well,

Did you already have insurance cover?

If you were already covered – for example you had a separate income protection policy or your employer provided an illness and redundancy package, and you informed the salesperson that you had this cover but they insisted you also had to take their insurance; or you weren’t asked if you had any alternative cover, go to the section.

Have you tried to cancel your policy?

Prior to Mar 07 some contracts had terms that said you could not cancel the policy even if you had paid off your loan or had a change of circumstances. Since the FSA looked into these refund terms, cancelling is now possible for all current and future contracts. So if you tried to cancel your policy and were told you weren’t allowed or that you needed to take out a new agreement with different terms claim now!

Is the insurance term too short?

Long term loans are often sold with a single premium policy lasting for a maximum of five years, no matter how long the loan is for. If you’ve now checked your policy and found that it does not cover the full term of your loan, but thought that it did, the salesperson should have pointed this out. If not- claim now.

Do you have a joint loan but the insurance is only in one name?

If you’ve checked your paper work and have found that all names responsible for paying back the loan are not covered under the insurance, which is unfair in itself as either could be chased for money if you get behind with payments, and were told or thought that all names were covered, claim now.

Did you sign up for the finance in a shop?

If you got a store card or insurance on a car dealership loan, it was likely to be sold by someone with no financial background, meaning more room for error, and a whole catalogue of misinformation could have been given. If this happened to you, check the insurance was sold in your best interests.

Just realised you have insurance?

Have you just checked your loan agreement or credit card statements to find that you have been paying for insurance, but didn’t realise until now that you had it or what it’s for? Some old agreements, particularly store cards, may have used pre ticked boxes requiring you to opt out of the insurance rather than opt in, which is unfair. Always check and if you’re paying for insurance you didn’t know you had claim now.
If you have an inappropriate PPI product and weren’t told it was inappropriate or you don’t think you were given the full information on what the policy would and would not cover, send a letter asking for an explanation.
Mis-sold unemployment cover

If you were unemployed or retired, then check if the policy included unemployment cover. If it did, the unemployment cover is worthless and this should’ve been pointed out to you. If you were self-employed you need to check whether you were eligible for a payout if your business went bust (usually not) and if not, and it wasn’t pointed out, you may have a case. Have you been paying for a policy which includes ‘unemployment’? If you don’t need unemployment cover, perhaps because you don’t work or are self-employed, and mentioned this when you took out the policy, or were never asked about your employment status at all, a reclaim may be possible.

Is the policy suitable?

The unemployment element of PPI is only suitable for people who were ‘working’ at the time they took out the policy, therefore you should have been asked about this at the time of application.

Example question: Are you in permanent employment, self-employment or contract employment for more than 16 hours a week?

Of course, if your policy only covers accident and sickness, with no unemployment element, this section doesn’t apply to you.

What is classed as ‘working’?

Providers have different definitions, so it’s important to examine your policy in detail.
If you’re self-employed, check whether your specific set-up is covered. As the ‘unemployment’ element is a substantial part of the insurance cost, many who are self-employed have been paying for a semi-useless policy and this could’ve meant a huge waste of money.

Those who were unemployed at the start of the policy (including students and stay at home parents), were almost definitely mis-sold the insurance as, obviously, you wouldn’t be covered for losing your job. The same applies if you knew you were going to become redundant or retire when you purchased the policy. If it isn’t suitable, were you mis-sold?
Assuming the policy isn’t suitable; we must establish whether the salesperson bothered to check. Remember, it’s the situation you were in at the time you got the cover that counts, so if you were an employee then, but are now self-employed, that’s not their fault – unless you’ve subsequently asked if the cover was still suitable and been misinformed.

It’s likely you were mis-sold if either:

A. You made the salesperson aware of your situation and they suggested you get it anyway.
B. You weren’t asked about your employment status at all.

Age is an issue

Most polices have an upper age limit of 65 or 70, after which you’re not covered for anything. If you were older than this when you took out your policy, you were definitely mis-sold. If you have passed the age limit since taking out the policy, your cover and therefore payments should have stopped, but if they haven’t for any reason you’ll at least be entitled to a refund of payments made since passing the age limit.

This situation is rare, as providers’ records should flag up someone’s age being too high from their date of birth, but do check.

Medical issues

Most policies exclude existing medical conditions, meaning you are unlikely to be covered for any medical problems you have had in the past. This is something you should’ve been asked about and informed the policy could be affected.

Lenders should ask about health issues when you get a policy, and if you weren’t informed the policy could be affected by medical problems or were never asked about your medical history, a reclaim may be possible.

Example question: Have you had any illness, accident or other treatment which resulted in you being off work for more than 14 days?

What is a pre existing condition?

Each provider has its own rules, but most are strict and may decide whether to pay an insurance claim based on what it considers to be reasonable for you to have known about before the policy started.

If you make an insurance claim on health grounds insurers may ask for medical records or proof you didn’t have the problem when you took out the policy, and will probably turn it down if you’ve had a similar medical problem before.

This is one of the biggest reasons insurance payouts are rejected as providers often take a ‘broad brush’ approach, for example if you had a bad lower back, they may decide not to pay for other unrelated back problems.

Were you asked?

Salespeople are not obliged to have a detailed medical discussion, but if they didn’t mention medical exclusions at all, the policy could be void. If you’ve had medical problems in the past this is not enough to make a reclaim, the key point is whether, at the time of application, you were told this was an important part of the policy and were asked to disclose any past health issues.

Some insurers provide medical cover if you have been symptom free for a few years prior to taking out the policy, so do check your own paperwork carefully. If this applies to your policy, then you weren’t mis-sold, so this section does not apply to you.

Other health related issues

As well as pre-existing health conditions, some general health problems are specifically excluded from many polices, such as stress. Check the terms of your own policy carefully to see if any particular conditions are not covered and if you were not told about such exclusions from the policy, or were incorrectly informed when you asked about them, you may have been mis-sold.

Did you buy online?

If you bought your loan or credit card online, reclaiming more difficult as the full T&Cs are usually available there. An exception to this is if you purchased from a lender using pre-ticked boxes, meaning you had to opt out of the insurance rather than opt in. In July 07 all lenders agreed to stop doing this but if you took out an agreement before this date check your policy for insurance.

Single premiums

A single premium policy is where the whole cost of the insurance is added as a lump sum at the start of the agreement, which is then repaid over the term of the loan. If you had one of these polices and left or changed the agreement part way through, you may be eligible for a part refund. This form of insurance is now frowned upon. In March 07, the regulator, the FSA said it thought they were likely to be unfair to consumers as they were restrictive and most didn’t allow refunds if a contract ended early, meaning you have paid the insurance for the whole term of the loan, even if it is not used. As a result of the FSA’s report, new and existing loan contracts must now allow refunds if a policy is ended early. This opinion greatly improves the reclaiming case.

Fined Providers

Several major providers, including Alliance & Leicester, Egg and Capital One have been fined for “not treating customers fairly”, and more are added every day it seems. The regulator, the FSA, has said it wants to see better practice and has fined several companies for failing to treat their customers fairly. More fines, which could be for up to £1 million, are expected.

Call 0845 475 5435 NOW to see if you have a claim.

Who’s been fined so far?

• Egg: Fined £721,000 in Dec 2008 for serious failings in its credit card PPI sales by telephone between Jan 05 and Dec 07. Egg has said it will be writing to customers, asking them to call a dedicated number if they are concerned they were mis-sold PPI, and will compensate where appropriate.
• Alliance and Leicester (A&L): Fined £7 million, the highest fine to date by far, in Oct 2008 for serious failings in its PPI telephone sales between Jan 05 and Dec 07. A&L has said it will be writing to all the customers concerned.
• 5 motor retailers: GK Group Limited, George White Motors Limited, Ringways Garages (Leeds) Limited, Ringways Garages (Doncaster) Limited and Park’s of Hamilton (Holdings) Limited were fined a total of more than £175,000 in Aug 2008 for exposing a total of 2,175 customers to the risk of being sold unsuitable PPI policies.
• Liverpool Victoria: Fined £840,000 in July 2008 for serious failings in the sale of single premium PPI on telephone loans sold between 14 January 2005 and 8 August 2007. It has also agreed to compensate customers if their policy is not appropriate and to refund interest automatically.
• Land of Leather Ltd: Fined £210,000 in May 2008 for allowing its sales force to sell PPI, between May 2006 and Feb 2007, without effective monitoring or training.
• HFC Bank, also trading as “Household Bank” and “Beneficial Finance”: Fined £1,085,000 in January 2008 for putting customers at an unacceptable risk of being sold PPI when it was not suitable for them. Failings took place in branches between Jan 2005 and May 2007.
• Capital One: Fined £175,000 in February 2007 for failing to ensure that 50,000 customers buying credit cards and loans between January 2005 and April 2006 received important information about the policy.
• GE Capital Bank Ltd: (supplies cards for Asda, Comet, Debenhams and Topshop among others): Fined £610,000 in January 2007 for inappropriate sales of its store cards and credit cards.
• Redcats: Fined £270,000 in December 2006 for also not having adequate systems and controls in place to minimise the risk of unsuitable sales.
• Regency Mortgage Corporation: Fined £56,000 in December 2006 for not collecting sufficient information during a PPI sale to ensure its recommendations met customers’ demands and needs.
• Loans.co.uk: Fined £455,000 in October 2006 for not having appropriate systems and controls to minimise the risk of unsuitable sales.
• Are you a customer of one of these firms?

If you’re a customer of one of these companies it may have already been in touch with you, but if it hasn’t you should definitely send a asking for justification that your policy was sold with your best interests in mind.

Other companies are likely to be fined too

The FSA is likely to announce further fines, this is important as it hugely strengthens your r
* E-claim.

Claims handling companies

There are a number of companies good who now offer PPI reclaiming services. Most of them offer ‘no win no fee’ deals, and will take a percentage of any successful claim. If you’re picking a company, check out its reputation. NEVER pay them a penny, and try not to agree to one which will take any more than 25% of your compensation. Try asking how long it has been handling PPI claims and for references from other satisfied customers, which it should be happy to do.

This is potentially big money for you. For loan reclaims we could be talking many thousands of pounds. Yet calculating the actual amount is difficult and often unnecessary, as the lender will do it for you. However, it’s possible to estimate how much the insurance has cost, to get of how much you can reclaim (of course it then depends whether you have a claim or not.

How far back can you go?

• * Did your policy start in the last six years?

If your policy started in the last six years, whether you’re still using it or not: Reclaim and ask your lender for a copy of the paperwork if you no longer have it.

• * Is your policy older but still active or ended in the last six years?

If your policy started over six years ago and you are either still using it, or it ended within the last six years: Reclaim and ask your lender for a copy of the paperwork if you no longer have it. Your chances of success may be reduced if you have been aware of the mis-selling for some time, you have already complained or your account is very old.

• * Is your policy older?

If your policy ended over six years ago and you have the paperwork: Reclaim, although your chances of success are reduced, as it will depend on what you can remember about the sale.

If your policy ended over six years ago and you do not have the paperwork: It’s unlikely there will be records and unlikely the reclaim will be successful.

Estimating how much the insurance cost you.

The amount of insurance is different from product to product.

• Loans

Obviously if you know what the insurance costs per month, simply multiply this by the length of the loan to work out its cost.

If not, you can do a very rough estimate as follows. Work out the total cost of your loan, simply by multiplying the monthly payments by the loan length and then take 15% off the total. This is a typical insurance cost (although it can be anywhere between 10 and 30%).

• Cards

The estimate is more difficult on cards as the amount you owe changes each month. Estimating is therefore far more of a ‘guesstimate’. Yet there is a way to get a very rough idea.

Most card insurance plans cost roughly 80p per month per £100 of outstanding debt. We can therefore work out that for every £100 of debt you have averaged over a year, you’d pay £10 in insurance. In other words, roughly 10% of your outstanding debt in insurance each year.

If you want to take this a step further and calculate the exact amount that may be owed, this is possible provided you have the paperwork. Though again, it’s not actually necessary as if the lender agrees the reclaim it should do it for you. To do it correctly you will need some paperwork:

* Loans: To do this calculation you need the original loan agreement. This should detail the loan amount, the insurance amount and the type of policy that you have or had. If the amount is monthly you need to calculate the total cost over the life of the policy.
* Cards: Here you need copies of your statements over the time period. Each month, the cost of the insurance should be detailed, so just add that up month by month.

If you don’t have the paperwork

If you want to check the costs and don’t have the paperwork, send a letter to your lender, requesting a full breakdown of your account, specifically including the cost of the insurance. If you ended your agreement over six years ago, your lender may no longer have this information as it only has to keep records for six years. If no one has a record of the account, a reclaim is unlikely to be worth pursuing.

Otherwise your lender has 40 days to send you the info. If it is late you can follow up your letter with a phone call and then report it to the Information Commissioner, as you have a legal right to this information under the Data Protection Act.