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HSBC Payment Protection

In 2008, HFC Bank (also trading as Benefical Finance and Holdhold bank) a subsidiary of HSBC was fined £1,085,000 for failures relating to the sale of payment protection insurance. The fine followed an investigation by The Financial Services Authority which found the lender had failed to adequately protect customers from the threat of mis-sale during in-branch sales between January 2005 and May 2007. Including HFC policies, a total of 1.25 million HSBC payment protection policies have been sold. It is impossible to say how many of these may have been mis-sold, but the issue of mis-selling has reached epidemic proportions across the financial world.

Following the High Court review in April 2011 HSBC announced it would be setting aside £269 million to deal with the PPI mis-selling crisis. The figure is a prediction of how much it may cost the lender to handle complaints and pay compensation as necessary.

Whilst the High Court’s decision was pending, HSBC payment protection claims were placed on hold. This has lead to a significant backlog. As a consequence, the Financial Ombudsman Service (FOS) has announced it will be allowing lenders additional time to deal with claims. Under FOS rules, lenders are usually allowed eight weeks to deal with complaints. The temporary rules will allow them an additional eight weeks to deal with some claims. If you are making a HSBC payment protection claim you may, therefore, expect to wait for several weeks to hear the outcome of your complaint. It is worth being patient, though, as all complaints will be addressed in time.

If you are unsure whether your policy was mis-sold and whether you could make payment protection insurance claims you should think about the information you were given at the point of sale. Before purchasing your policy your lender should have given you full information regarding your policy including all costs, terms and conditions. If you did not receive this information then you were not in a position to make an informed decision regarding whether or not to take up the policy.

It is also important that none of the information you were given was misleading or incorrect. If you were told you had to have the cover or it would improve your chances of being given the loan you were given the wrong information and could make a claim.

Payment protection was also mis-sold to people who were not suitable for the cover. If you had a pre-existing medical condition or were over the age of sixty-five, for example, you could not be offered cover under many PPI policies. If you were sold a policy you shouldn’t have been you could be entitled to claim a refund. Similarly, if you were sold a policy that could only be of limited use to you, you could be entitled to make a claim. A good example here is customers who were unemployed or retired. PPI covers for loss of employment - if you did not have a job you clearly did not need it.

To find out more call 0207 471 2000.


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Belmont Thornton Limited is regulated by the Claims Management Regulator in respect of regulated claims management activities; our registration is recorded on the website www.gov.uk/moj/cmr number 18273

Belmont Thornton Limited is incorporated in England and Wales, Company number 6621233, whose head office at Unit B16, Kestrel Court, Harbour Road, Portishead, Bristol, BS20 7AN and registered office at Harwood House, 43 Harwood Road, London, SW6 4QP.

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* Belmont Thornton operates on a "No Win No Fee" basis. This means that there are no upfront costs to pay. Our fee only becomes payable on a successful outcome of a claim. A cancellation fee is payable if you decide that having instructed Belmont Thornton to act on your behalf, and after 14 days of signing your Letter of Authority, you do not wish to continue pursuing your claim with us. The cancellation fee is the reasonable costs incurred for the work undertaken. Please see our terms of engagement.

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