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Alliance and Leicester loan insurance

If you have a payment protection policy with Alliance and Leicester you are probably aware that the company was fined £7 million in 2007 following ‘serious failings’ with regard to the sale of this kind of cover. You may not realise; however, that this was the highest fine handed out by the Financial Service Authority in relation to mis-selling or that it is thought as many as 210,000 customers may have been affected.

The specific issues highlighted by the Financial Services Authority regarding Alliance and Leicester loan insurance sales included the fact the lender had trained staff to recommend cover to customers who may not have wanted or needed it.

It is difficult to pinpoint the exact cause of the payment protection scandal, but it has become increasingly evident that this is a problem that has affected almost the entire lending industry from small brokers to multi-national banking groups. One undeniable fact is that, for many years, the sale of payment protection insurance was a huge source of revenue for lenders. The industry as a whole generated £5.5 billion a year and PPI was said to often be more profitable for lenders than interest from the loans to which it was attached. The huge profits involved led many lenders to offer large rates of commission and this, in turn, led some salespeople to use high-pressure sales techniques and unfair practices. Other suggested causes include a lack of training and a failure by lenders to put in place appropriate internal processes to protect customers from being sold an unsuitable policy.

Whatever the cause of the PPI scandal, its affects have been far reaching. Since 2005, 1.5 million complaints have been made to the Financial Services Authority and millions of pounds in compensation have been paid out.

To make a PPI reclaim or to find out whether you may have been mis-sold an Alliance and Leicester loan insurance policy call 0207 471 2000.

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