Is it permissible to reclaim PPI (Payment Protection Insurance)?
In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.
It is permissible to reclaim mis-sold Payment Protection Insurance (PPI) up to the amount one has paid to the insurance company in the form of premiums.
The Fiqh (jurisprudence of the Answer):
Conventional insurance contracts are irregular and voidable (fāsid) contracts. The ruling of voidable contracts is that they must be nullified if possible. Thus, besides mandatory conventional insurance contracts and permitted insurance contracts based on necessity, the remaining insurance contracts should be nullified.
Reclaiming PPI will be a means of cancelling your contract. One cannot take more than the amount paid as the excess will be a form of interest.
And Allah Ta’ālā Alone Knows Best
Mufti Faraz Adam
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