When thinking of PPI, most of us tend to think of claims on an individual basis but for businesses that took out loans between 1990 and 2010, the potential for a mis-sold policy is still shockingly high.
While everyone is familiar with consumer claims by this point, the process and eligibility for a business isn’tquite as widely advertised by the news or PPI claim companies and as a result, thousands of business owners aren’t claiming funds that are rightfully theirs. Here, we’re taking a deeper look into whether businesses can claim for mis-sold PPI in the same way as consumers, and how they go about doing precisely that.
What Is Business PPI?
Business PPI works in a very similar way to consumer PPI, in that it is often sold alongside loans and finance with the intention to provide cover in the case of injury, illness or death. This could be an unsecured loan, an overdraft, a credit card or a mortgage so long as they were associated for business purposes. The policyholder within the business would be responsible and would be the only person who could make a claim using the protection policy.
One difference worth noting, is that while most consumer PPI policies were named precisely that, business payment protection insurance could come under a number of different titles including ‘business PPI’, ‘Commercial PPI’, ‘Business Loan Repayment Insurance’ and ’Commercial Overdraft Repayment Insurance’ and all are eligible for claims if they were mis-sold.
How Was It Mis-Sold?
Of course, PPI for consumer or business purposes may have been designed with good intentions, but it went on to be mis-sold to thousands of businesses. The true scale of this isn’t widely advertised and is generally unknown, but it’s possible that any business with a loan between these times could very well be eligible for a claim.
The criteria are as follows:
- The policy was sold to the business without their knowledge
- It was not made clear that the PPI policy was optional
- The policyholder felt pressured into taking out PPI
- The costs were not fully explained
- Exclusions were not explained, or PPI was sold despite the policyholder or business being excluded from claims.
- It was not explained that the business had to operate from the UK
- Refund criteria wasnot explained, including the fact that early repayment could entitle the business to a partial PPI refund.
The Compensation Expectations
If a business’s PPI claim is accepted by their lender, then there is a chance of receiving substantial compensation as a result. In most cases, the compensation can be one or all of the following:
- A full refund of all premiums
- A full refund of any interest
- Compensatoryinterest of 8% per annum on all premiums and interest.
- Any losses the business suffered as a result of mis-sold PPI (e.g. missed business opportunities, failure to claim, extra unnecessary payments)
How Can Businesses Claim?
Businesses can make a claim for PPI in a similar way to individual policyholders. Before the deadline on the 29thAugust 2019, businesses can write or contact their lender directly to contest mis-sold PPI.
In most cases, a claim will be successful if you fit the criteria listed previously and in the case that you do fit and your claim was rejected, the Financial Ombudsman Service may be able to provide assistance.