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Can I claim for mis-selling even if my PPI paid out?

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With potentially billions still owed for payment protection insurance (PPI) mis-selling, many consumers don’t know where they stand. Even if your PPI paid out while you had the policy, it still may have been unsuitable for you. As a result, you can claim for mis-selling.

My PPI paid out

A recent case saw a consumer successfully claim compensation despite the insurance paying out six times. The consumer’s PPI paid out £12,000 while they held the policy. However, it was discovered that the premium had still been mis-sold. Therefore, the customer was entitled to compensation for the initial premium amount of £3,364.


Though the PPI paid out, the customer was not suitable for the insurance at the time of selling. PPI was sold to consumers as cover in the event of them being unable to meet loan repayments due to unforeseen circumstances such as poor health. However, this particular customer was eligible for generous sick pay from their employer. This meant that the premium was not suitable for them at the time of selling.

The Financial Ombudsman Service (FOS) upheld the consumer’s complaint. This may give many in the same situation grounds for complaint.

What is PPI?

PPI is payment protection insurance. It is a type of insurance which was sold to customers taking out a credit agreement such as a loan. It was sold with:

  • Mortgages
  • Store cards
  • Credit cards
  • Personal loans
  • Overdrafts
  • Hire-purchase agreements
  • Catalogue shopping accounts

The insurance was intended to cover the customer if they were unable to meet repayments. PPI covered situations like illness or redundancy and paid out if the customer met these requirements.

However, many advisors sold the premium to people who were not suitable for the insurance. They did this as insurers incentivised the PPI sale, offering high levels of commission. This has led to a mis-selling scandal that has so far reached a bill of £30bn.


The unfair levels of commision brokers and lenders received for the sale of PPI has also opened up another avenue for people to seek compensation.

If you want to read more about unfair commission levels and what it could mean for your PPI claim, click here to read our blog on the Plevin rule.

If you had PPI that paid out get in touch to see if you could still make a claim.