MORE than £6,000,000,000 pounds is sitting waiting for four million people who’ve been unknowingly misled by their banks on credit cards and loans – roughly £1,500 per person.

Having thrown in the towel and given up defending their disgusting mis-selling of Payment Protection Insurance (PPI) last month, banks have now ‘provisioned’ that enormous sum.

In other words, it’s in their coffers waiting to be paid out in compensation. Millions are blithely ignorant they’re entitled to this cash.

Don’t expect it to magically appear in your pocket: while banks must process existing complaints and contact some who are unaware they’ve been mis-sold, they don’t need to contact everyone.

So it’s best practice to assume you won’t be contacted and do it yourself as soon as possible.

Frankly, it’s now just really, really easy to do, so I’m frustrated many are wrongly giving away huge chunks of cash by unnecessarily using claims companies.

There’s no need. I’m very proud that more than a million template letters to do this have been downloaded from my site www.moneysavingexpert.com/ppi over the years, many winning.

And other campaigning organisations like Which? have their own free help resources, too.

Since the banks held their hands up on this a month ago, I’ve been swamped with questions, so here are the answers. Everyone who’s got or had a credit card, store card or loan in the last six years should read on.

Q. What is PPI – is it always bad? It’s an insurance policy that covers your repayments, usually for up to a year, in the event of accident or sickness.

In itself, it can be a good policy. Yet banks sold massively over-expensive policies, pushing them too hard to too many – often worthless to those who got them.

Don’t let that put you off getting the insurance, just don’t think you need get it from your bank.

Q. How do I know if I’m affected? It could be anyone who’s got or had a loan, store card or credit card that was active within the last six years.

Check documents now to see if you have PPI; one form of mis-selling was adding it without telling you (and hiding its cost within the loan). It doesn’t matter if the loan’s paid off or you’re insolvent. If you were mis-sold, you can reclaim.

Q. What counts as misselling? Not all PPI was mis-sold, but an enormous number of bank-sold policies were.

The key is that the lender needed to ensure the policy was appropriate for you at the time you took it out.

Some of the big misselling categories are: banks lying that the policy was compulsory or you needed to get it to get the cheap rate; giving people employment cover when they were self-employed, so it couldn’t pay out; not asking about pre-existing medical conditions, so they couldn’t inform you that these were excluded.

Q. How to reclaim? Just send a written complaint now. Free template letters, a full detailed mis-selling checklist and how to appeal for free if you get rejected are at www.moneysavingex pert.com/ppi or, for those with credit cards, www.moneysavingex pert.com/CCPPI.

There are also template letters for the specialist actions, such as ‘requesting your credit agreement’, as detailed below.

Q. How far back can I claim? As long as the loan or credit card was active in the last six years, you can claim. So a loan from 2000, repaid in 2006, counts. In rare cases, you may be able to go back further.

Q. The loan/card is paid off. I can’t remember who it was with?

The easy way is get copies of your credit reports from the credit reference agencies www.equifax.co.uk or www.experian.co.uk, which you can do speedily online for £2, plus there are ways you can do it for free (worth doing regularly anyway to check there are no errors which can kibosh future applications).

Q. I’ve no paperwork. What can I do?

PPI is often listed on your credit agreement. Under the Consumer Credit Act, you’ve a legal right to apply to lenders for a copy for £1.

Then just look for mentions of the insurance. If it’s not on your agreement, under the Data Protection Act, for £10, you can ask it for all info on you.

Q. How much could I be due? On a £5,000 loan over five years PPI typically cost £1,000 and if missold, you’d be entitled to it all back plus interest. Yet many credit card holders with big debts or secured loan holders get much more: I’ve had many £10,000+ successes reported.

Q. I’ve had a PPI reclaim rejected. Can I try again?

In recent years, banks and other lenders rejected 60 per cent of complaints on average, including many valid ones, just to put people off.

Yet new rules state they must follow new complaint guidelines. If you were mis-sold, complained, had it rejected but didn’t appeal to the Ombudsman, start a fresh complaint back at the bank or lender.

The banks we spoke to confirmed they will hear re-started complaints, and you’re much more likely to win now.

The only difficulty with re-started complaints is you usually only have six months to escalate them to the free, independent Financial Ombudsman Service. Many who were previously rejected will fall foul of this – hence why I’m suggesting you re-start your claim.

Sadly, if your re-started claim is rejected, this rule may mean you can’t appeal to the Ombudsman, though it’s still undecided.

Your chances of winning in the first place are better.

Q. What if my claim’s on hold?

If you weren’t rejected, but the bank just said the case is on hold, expect to be contacted in the next few weeks (if not already).

Q. Does it vary by bank or card company? There are no good guys here, but some banks were worse than others: the scale of the cash they’ve put aside to pay this is a very good indication.