Compensation claims for Payment Protection Insurance (PPI) misselling are twice the size of the national average if you live in the South East of the country, according to Forbes Douglas, a Claims Management Company.
"The average PPI Misselling claim we handle for clients in the South East is worth £6,800, compared with just £2,900 nationally" explained Aaron Playle, managing director of the Hertfordshire-
"People here paid far more for their PPI simply because they borrowed larger sums compared with the rest of the country. Misselling is a scandal that will cost the banks billions in compensation."
PPI or loan protection insurance is often sold as an add-on product with loans, mortgages and credit cards. It is supposed to pay out if borrowers cannot meet loan repayments because of redundancy or illness.
In the past it was sold aggressively by lenders and is controversial because it is expensive and hugely profitable for the banks.
But many borrowers weren’t told the insurance was being added to their loan or were told it was compulsory. The cover was often unsuitable – for example, if the customer was self-employed or had an existing medical condition, the insurance was worthless.
Complaints to the Financial Ombudsman Service about PPI misselling grew by 58% last year. The vast majority are upheld in the consumer’s favour and compensation awarded.
"Large bonuses and commissions encouraged sales staff to sell this product to borrowers when it simply wasn’t appropriate for many. Over 90% of the complaints we handle end up with our clients winning compensation and interest.
"One of our clients recently won 2 claims worth a total of £6,700, against Tesco Personal Finance and Sainsbury’s Bank. Our biggest single successful claim to date is £11,800 for PPI added to a First Plus loan, although we have another claim currently going through which is worth £26,000" added Mr Playle. Visit http://www.forbesdouglas.co.uk/
What matters is what you were told when you were sold the insurance. You may have a claim if..
- You were told you wouldn’t get a loan without taking the insurance
- You were self-employed, unemployed or retired when you took the loan
- You had pre-existing medical conditions but weren’t told these were excluded from cover
- Your lender has already been fined. Alliance & Leicester, Loans.co.uk, Capital One and many others have been fined.
- You had existing cover, for example at work or on your partner’s policy
Mr Playle advises: "To make a claim write to the company that sold you the policy and tell them why you believe you were missold. Demand a refund of everything you’ve paid, PLUS interest.
"Don’t give up when the company writes back with a refusal. This is standard practice. Write back and tell them you’ll go to the Financial Ombudsman if they don’t pay up. In the end you may have to take your claim to the ombudsman. Persistence is the key, though it can be a demoralising process for the individual. But you’ll be glad you took action when the cheque drops onto your doormat."
