PPI deadline passes: Are estates now at risk?

The deadline has now passed for individuals, including Executors and Administrators of estates, to reclaim Payment Protection Insurance (PPI). In order to claim money back for PPI, complaints needed to be submitted to the providers or Financial Ombudsman Service by the 29^th of August 2019. Financial institutions had set aside money to cover the billions of pounds that remained unclaimed.

What is PPI?

PPI was intended to cover repayments on loan and credit products when individuals were unable to make repayments. It applied to cases where an individual couldn’t work due to illness, disability or death, or if they were made redundant. PPI was mostly mis-sold, especially between 1990 and 2010. Therefore, a high proportion of people who took out a credit card, mortgage or cash loan were likely to have a reason to complain that they were mis-sold PPI.

How could PPI claims impact estates?

Back in April 2019, the Society of Trust and Estate Practitioners (STEP) warned practitioners of an issue related to Payment Protection Insurance (PPI) claims against estates. They advised that if those administering estates didn’t investigate whether the deceased had PPI, they could be held liable for future claims against the estate.

Executors and Administrators are financially and legally responsible for administering the deceased’s estate correctly and maximising the value of the estate for the beneficiaries. They can be held personally liable for any errors or misdistribution.

The STEP briefing note stated: “Claims management companies, after 29 August 2019, may change their focus to pursuing outstanding claims on behalf of beneficiaries against the fiduciaries involved. The potential argument might be that fiduciaries, and their advisers, would have been expected to investigate whether estates were entitled to compensation.”

Kings Court Trust are specialists in estate administration, and we are proud to say that we go the extra mile for the estates that we administer. Once the issue had been identified, we made the decision to review all open and closed estates that could have been affected. We investigated whether a PPI claim could be made and submitted the checking requests to the relevant financial institutions. The institutions will now investigate our checks, convert them to complaints where mis-sold PPI is identified, and begin to distribute funds once the complaints have been dealt with. When we begin to receive funds, we’ll review each estate before distributing to the beneficiaries.

Additionally, on the back of the work we were doing with PPI checks, we helped our partners that had acted as an Executor or estate administration professional. In total, we completed over 10,000 checks to protect estates from future claims.

What happens if I missed the deadline?

Although the deadline has passed and most people will be unable to submit a claim, there are some exceptional circumstances where claims may still be possible.

1. Exceptional circumstances

If you missed the deadline due to exceptional circumstances, you may still be able to claim. Each case will be assessed on its individual merits and you will need an extremely good reason for not being able to claim earlier.

2. System failures

If you tried to claim in the immediate approach to the deadline, your claim could have been impacted by system failures. Many leading financial institutions suffered from system errors so you should immediately get in contact with them if you were affected.

3. Go to court

You can still make a PPI claim after the deadline via the small claims court. However, there’s currently a lack of evidence to suggest that this approach will work, and it’s likely that claims would need to be made within six years of the PPI being sold.

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