Martin Lewis: How to URGENTLY reclaim PPI for a deceased relative
It's enough to make even the Great Train Robbers blush. A staggering £30 BILLION of payment protection insurance (PPI) has had to be repaid, typically £3,000 each, due to systemic mis-selling. Yet still no one has been prosecuted for fraud.
This saga has dragged on so long, we have to consider those who have passed away without getting financial justice. Ever since I first warned of the PPI scam in 2001 (and it's been going on far longer), that's an estimated 10 million Brits. Many of them would have lost out to this bank and building society heist.
Indeed, families often discover their lost relative had taken out PPI during the onerous task of sorting through their affairs, finding it while going through paperwork for credit and store cards, mortgages, overdraft or catalogue debt – some even going back 30 years. So it's important to know the PPI reclaim does not die with the individual.
'I reclaimed £35,000 owed to my late husband using MSE's PPI guide' - read more here.
The PPI deadline is almost here
A couple of years ago, banks finally managed to persuade the regulator to close the door on PPI reclaiming. So whether it's you who's due, or a deceased relative, you must start a reclaim by Thursday 29 August. If not, it'll no longer be accepted, and your only recourse will be the much trickier prospect of going to court.
If it's for you, go quick. There's no need to pay anyone, use our free PPI reclaiming tool & guide (which includes help and info if you can't remember the lender or don't have the paperwork). If it's for someone who has passed away, it's even more urgent as getting the paperwork together may take time.
Who can reclaim for a deceased relative?
Any monies owed become part of the deceased person's estate, and go to the beneficiaries (eg, a spouse or children). As for who officially makes the claim...
- If there's a will, it's the executor who'll need to show the bank the Grant of Probate.
- If there's no will, it's the administrator who'll need to show the Letters of Administration.
- For small estates (under £5,000 in England, Wales and NI or £36,000 in Scotland), it's the next of kin who needs to show proof of their relationship to the deceased and prove it was a small estate.
If you're the beneficiary and not the executor/administrator, you may want to do the legwork for them.
These reclaims can be huge. Mrs Cork emailed...
I found several old loan statements showing PPI in my late husband's paperwork. Six weeks later, the bank wrote back saying they would be paying me £33,000. Thank you.
And Mands tweeted...
@MartinSLewis Just been offered £2k for my deceased husband's PPI. Thanks for your article. He died 13 yrs ago.
If you don’t have a deceased relative's paperwork, then as the executor (or administrator) of the will, you are entitled to get hold of it, in the same way as the deceased would have been if they were still alive.
To find out what lender(s) they were with you can get their credit file from one of the credit reference agencies. The simplest way is to ask for the free statutory report from Experian, Equifax or TransUnion with proof that you are the executor/administrator. They will also usually want two original documents to confirm your residency at the address you want them to send the report to.
Then once you know the lenders, if you don’t know whether they had PPI or not, you're entitled to request the paperwork (see request paperwork). Again you’ll just need prove that you’re entitled to do so.
How to find out if the PPI was mis-sold
PPI was sold as cover for a debt's repayments in the event someone lost their job or got sick – in itself not a bad concept. Most were outrageously expensive though and only paid out for a year; some even cost more than the max they could pay out.
The biggest issue was that lenders failed in their duty to check if these policies were suitable and wanted. Common mis-selling included (see the full PPI mis-selling checklist)...
- Lies that it was compulsory (it wasn't).
- Adding it without permission.
- Lies that it'd result in a cheaper debt.
- Selling it when it was inappropriate, eg, 'unemployment cover' for the self-employed, or not asking about pre-existing conditions that could invalidate it.
- And finally the Plevin rule means for policies active in or after 2008, if the commission banks were paid was over 50% and you weren't told (I've never met anyone who was), then you're entitled to the difference back – and the AVERAGE commission insurers bunged the banks for flogging their PPI was 67%.
This means millions who have had PPI, even if it was sold right in every other way, are due something back – though it only applies to policies active in or after 2008.
So tell the lender as many details as you know about the deceased's circumstances at the time they got the policy – employment, sick pay entitlement, additional cover they had, and their health. Better still, if someone else was present at the time of the sale, they can tell what they remember (especially where the credit was taken by more than one person). This doesn't have to be done in highfalutin language.
If there's no one with direct knowledge, then as mis-selling was systemic, they'll look at whether at that time and place, others in similar positions were being mis-sold too. And remember Plevin means, for many, even just having PPI means you're owed.
How to claim for someone who has passed away
In most cases (such as with Barclays, HSBC and Lloyds) you put in the PPI reclaim for your deceased relative first, in the normal way. Then as part of the process, it will ask for proof that you are entitled to make the claim. A few (eg, Santander) usually ask for proof first, and afterwards you can put in the PPI complaint, so have everything ready.
After that, the process is pretty straightforward. Use our free tool, and if you're stuck call regulator the Financial Conduct Authority's free helpline on 0800 101 8800.
And remember the key rule: if the lender says no, that doesn't mean it's over. If you believe your PPI was mis-sold, escalate your claim to the free Financial Ombudsman to adjudicate.
Do let me know below how you get on...
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