Any claim of insurance mis-selling must be directed at the company that brokered the insurance as opposed to the actual lender or insurance provider. Although it is possible that the company that brokered the insurance and the company that supplied the loan are one and the same, this is not always the case. In those instances when a separate company were responsible for brokering the insurance, the mis-sold PPI claims procedure differs from the standard protocol. This becomes an even more complicated situation in those cases where the insurance broker has ceased trading.

For those many people who took out loans through lenders and brokers that are no longer trading there is a serious risk that they are unable to recover their losses. It may well be true that they were mis-sold PPI and consequently justified in forwarding a complaint to the Financial Ombudsman Service, but this is purely academic if they will not recover any money for doing so.

The truth is that money can be recovered when claiming against a broker who has ceased trading, but it's important to know the differences between this type of claim and a standard mis-sold PPI claim. It may in fact be the case that you are better off when the broker/lender has ceased trading.

A standard successful claim for mis-sold PPI results in the claimant being refunded the amount paid on the insurance as well as an additional 8% in compensation. The premium for the insurance is taken off the loan and therefore the monthly payments go down if the loan is still being paid off. If the loan has been repaid then a successful PPI claimant will get back all payments made towards the PPI, plus the 8% compensation and a rebate for any incorrect calculations at the time of working out a settlement figure. The rebate can come to a sizable sum, as very few lenders calculate this on a pro-rata basis.

A claim against a liquidated company or one in administration is a complicated affair but the rewards are potentially greater. There are a number of practices to consider and complete in order to be remunerated for funds outlaid on the PPI.

First of all, the claim is for the total Insurance Premium that was added to the loan regardless of the losses or the time the loan has been in force. The monthly payments won't go down but the insurance will stay in place. In addition a figure is added to the refundable sum based upon interest paid, as this is based upon the LIBOR rate however, it is unlikely to be a particularly substantial sum.

From here, the next step is to cancel the insurance in order to get a refund of the unused portion of the insurance. This will result in the reduction of monthly payments toward the servicing of the loan: this step only applies if the loan is still in the process of being paid off.

There is a limited timeframe in which to get a claim processed by the compensation scheme so it is important to use a company that has in depth knowledge of the processes. Failure to do so or the use of a sub-standard debt management of PPI claims organisation may result in the abandonment of your claim once the status of the insurance broker is realised by the financial service provider.