Lloyds is earmarking £1.4bn for meeting PPI compensation claims - here is what to do if you were miss-sold payment protection

Think you might have a claim? Here is how you can get your compensation

Lloyds Banking Group has agreed the £1.7bn takeover of its former offshoot TSB (Getty Images)

Lloyds Bank has been forced to earmark a further £1.4bn for meeting PPI compensation claims. It will bring the total the bank expects to have to hand back top customers to a staggering £13.4bn. However it warned that if claims continue at their current level, it may be forced to set aside another £1bn.

If you haven’t yet been awarded compensation for mis-sold payment protection insurance, what should you do?

The first thing to do is to find out if you were mis-sold the often useless and expensive cover. You should be eligible for compensation if you were flogged the cover while you were self-employed, out-of work, retired or had a medical problem that invalidated the cover.

You should also be eligible for compensation if you were told the insurance was compulsory or if the total cost of the policy was not fully explained to you.

Finally if you were sold PPI without knowing you were paying for it, which often happened when it was simply added to the cost of personal loans, you are likely to have a valid claim.

In short, if you had PPI on a loan or credit card, it is likely you were mis-sold it and therefore will be in line for compensation.

Key questions

What if I can’t remember what loans or credit I took out?

You can find out by buying a copy of your credit file from one of the credit report agencies such as Experian or Equifax.

How do I apply for compensation?

Write to the firm which sold you the policy. You can find free templates for letters at http://www.which.co.uk/consumer-rights/action/letter-to-reclaim-ppi-for-free

How much will I get?

That depends on how long you had a policy. Many people have been getting healthy payouts of around £2,000 but one claimant recently reported being awarded just 3p.

How long will I have to wait for my money?

Banks have eight weeks to respond once you have put in a claim. But with no time limit on pay outs, expect a long delay of maybe months. There is a huge backlog so you’ll simply have to wait your turn.

What if I’m not happy with their decision?

You can take your claim to the Financial Ombudsman Service. Call 0300 123 9123 (8am to 6pm Monday to Friday), go online to http://www.financial-ombudsman.org.uk or write to: The Financial Ombudsman Service, South Quay Plaza, 183 Marsh Wall, London, E14 9SR.