Payment Protection Insurance (PPI) was created to assist people with their loan repayments, to cover loan, credit card or mortgage payments should they fall ill or lose their job. The basis of this insurance sounds like a great idea, whereby you pay a little extra each month to try to ensure your repayments will always be met, regardless of what unforeseen challenges may be around the corner.
The truth, however, is that thousands of customers who took out loans, mortgages or credit cards from their lender or broker were mis-sold PPI. The Citizens Advice Bureau estimated that up to 80% of these policies could have been mis-sold, with the cost of this PPI adding a staggering 13 to 56% to the cost of the loan.
In May 2011 the banking industry abandoned a legal fight over the mis-selling of payment protection insurance. The British Bankers Association, which fought the case, said it would not appeal after losing a court challenge against the rules on mis-selling.
Barclays then announced that it had set aside £1billion to pay compensation, HSBC £269 million, while Royal Bank of Scotland added £850 million to the £200 million it has already paid or provided for. The largest offender was Lloyds, who made a £3.2 billion provision for possible claims.
Back in 2008, the Financial Services Authority (FSA) imposed a record £7 million fine on Alliance & Leicester for serious failings in the sales of Payment Protection Insurance. Between January 2005 and December 2007, Alliance & Leicester sold around 210,000 PPI policies to its customers, with the average policy costing £1,265. Other fines imposed by the Financial Services Authority for the mis-selling of PPI include:-
Fines relating to the mishandling of PPI claims:
Lloyds Banking Group £117m
Alliance and Leicester (A&L) – 7m
RBS/Natwest – £2.8m
HFC Bank – £1,085,000 (Part of HSBC)
Liverpool Victoria (LV) – £840,000
Egg – £721,000
GE Capital Bank – £610,000
Loans.co.uk – £455,000
Capital One Bank – £175,000
Co-op Bank fined £113,000
*Sources to the above articles can be found at the bottom of the page.
Do you have PPI?
Many customers across the UK may have had PPI added to their agreements without being advised or informed of the optional nature of the policy. Banks and lenders use many different names to describe PPI, such as LoanGuard, Loan Protection, Loan Cover or Accident, Sickness and Unemployment Insurance. No matter what they call it, you may have been mis-sold Payment Protection Insurance, and we can help you claim it back.
No obligation assessment
Direct Redress is here to help you achieve the best possible outcome if you have been mis-sold. For a free, no-obligation assessment, to find out if you could have been mis-sold PPI, simply contact us, and we’ll be more than happy to help you find out if you have a claim.
*Source: Financial Services Authority