For more than 50 years Black Horse has provided customers with loans to finance the purchase of vehicles as well as personal borrowing. Every year the company provides loans to more than 25,000 customers through a network of more than 7,000 dealerships. Black Horse has been caught up in controversy in recent years; however, after finding itself as one of the main lenders at the centre of the payment protection insurance scandal. As a consequence, Black Horse announced in the summer of 2010 that it would no longer sell Payment Protection Insurance cover to new customers.
PPI covers borrowers in the event they are unable to keep up with debt repayments as a result of loss of employment through redundancy, sickness or accident. In theory this sounds like a worthwhile insurance cover to have in place, but it is often very expensive and has been frequently mis-sold. In 2006 The Financial Services Authority investigates the loan protection insurance market and found many areas of concern. It highlighted a lack of general staff training and a failure by many providers to protect their customers from the threat of mis-sale. As a result of their investigation, many businesses were fined and the Payment Protection market as whole was warned it had to make swift improvements.
Since the 2006 investigation there has been a steady increase in the number of unhappy customers wishing to claim back ppi and the number of complaints, particularly regarding those sold post-2006 show there is a great deal of improvement still to be made. In fact, in the last year, the number of Black Horse insurance complaints upheld by The Financial Ombudsman rose from 53%-83%
There are many different ways in which payment protection insurance has been mis-sold, but these reasons can be broadly divided into two categories either the customer was:
- Given information that was incorrect, incomplete or mis-leading.
- Sold a policy that their circumstances made them unsuitable for.
The cause of the Payment Protection scandal has been debated widely and there does not seem to be one single reason. The Financial Services Authority pointed to a lack of training which meant staff didn't have the core knowledge to explain the policies effectively or determine whether a customer was suitable. Others have claimed the scandal was caused, or at least inflamed, by the high rates of commission offered by many lenders to their staff. With large financial incentives on offer many developed a 'sell at all costs' attitude resulting in some sales staff using high-pressure sales techniques and other under-handed practices. In the worst cases, some sales staff even added Payment Protection Insurance to customer's loans without their consent. The Chief Executive of Which? Peter Vicary-Smith said earlier this year that there needed to be a 'fundamental overhaul' of the commission system adding 'when bonus structures reward staff for selling products which may be unsuitable, is it any wonder that we are seeing this level of complaints.'
Black Horse is a subsidiary of The Lloyds Group which was the most complained about group with regards to PPI in 2010. This is, of course, partly because of the sheer size of the group which is estimated to have sold as many as four million PPI policies. In May 2010 Lloyds announced it would allocate £3.2 billion to resolving the payment protection issue. The decision came at a cost, though, as the company recorded a loss of £3.5 billion in the first quarter of the year – most of which came as a direct result of the PPI funding promise.
If you believe you have been mis-sold a payment protection policy by Black Horse or any other lender you can start your claim today by calling 0207 471 2000. We have already helped in excess of 60,000 customers make complaints and recover more than £50 million.
There is no limit to the number of PPI claims you can make and you could have been sold a PPI policy alongside a hire purchase agreement, personal loan, mortgage, credit card or store card. You can even make a claim if you have already paid off your loan or you no longer use your credit card account. Call us today – you really could be owed thousands!