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HSBC Loan Insurance

In May 2011 HSBC announced it was to allocate £269 million to deal with payment protection insurance claims. The figure is substantial and reflects the significant amount of policies sold by the lender thought to be in the region of 1.25 million.

The issue of mis-selling first emerged in 2006 when the Financial Services Authority and the Office of Fair Trading investigated the payment protection industry. Widespread failings were discovered and lenders were warned standards must improve. Since that time the number of unhappy customers making claims for mis-selling has continued to rise. This is not just an issue that has affected HSBC loan insurance, but the banking industry as a whole.

The term ‘mis-selling’ is quite a broad one and can encompass many different issues. Examples of mis-selling can range from a customer being given incorrect or insufficient information to a customer being sold a policy they were ineligible to use.

In the same year that the Office of Fair Trading investigated the mis-selling of payment protection insurance, they also looked at the charges applied to credit cards for late payments and over the limit fees. The investigation revealed that charges of up to £35 were applied by some lenders regardless of how much the customer exceeded their limit by or how late the payment was. Lenders tried to justify these charges as necessary to cover the costs incurred. The Office of Fair Trading dismissed this notion, though, and announced that a maximum charge of £12 should be applied. Since this announcement most lenders have lowered their fees, but customers who have paid high fees in the past have been left angry that they were forced to pay fees that have now been deemed to be unfair. The good news is that customers who have paid unfair charges in the past now have the right to make a complaint.

If you think you were mis-sold a HSBC loan insurance policy or you think you may be entitled to claim back unfair bank charges call our team on 0207 471 2000.

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