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Mis sold PPI Barclays - Belmont Thornton

Mis sold PPI Barclays

Payment Protection Insurance has risen through the ranks to become the most complained about insurance product. In the last 5 years more than 1.5 million complaints have been registered across the industry and billions of pounds. Mis sold PPI Barclays alone have cost the lender £200 million with an additional £1 billion set aside for future claims.

The principle behind Payment protection insurance was sound enough. It was designed to cover a borrower who could not work because of accident, involuntary unemployment or sickness. The cover was supposed to step in, as a temporary measure, to cover the policyholder’s repayments until they were well enough to return to work. The cover is just not suitable for everyone, though, and has been extensively mis-sold. As a consequence, thousands of people have demanded compensation for mis sold PPI Barclays.

The cover has been sold for almost thirty years and is attached to loans, mortgages, credit card, hire purchase agreements and store cards as well as being sold as a standalone product. For much of this time the policies were regarded as a lucrative additional revenue stream bringing in around £5.5 billion a year. In fact, Payment Protect cover was often generated more income than the interest from the loans to which it was attached.

The PPI bubble burst in 2006, though, when investigations by The OFT and The FSA revealed significant failings across the payment protection industry. Many lenders were found to have inadequately trained staff to sell the cover and to have failed to create and protect processes to protect customers from mis-sale. The investigations drew attention to the mis-selling issue and there was a significant leap in the number of people making complaints and demanding compensation for mis sold PPI Barclays.

Since 2006 the number of complaints has grown year on year. In part, because of increased media coverage and awareness, but also because further investigations and exposés have revealed the mis-selling scandal stretches much further than first imagined.

Following the original 2006 investigation The FSA looked at many lenders more closely. Their investigations revealed serious issues with the control and sale of payment protection cover. Huge lenders like Alliance and Leicester, Capital One and Egg were handed fines in 2007 and 2008 and the industry as a whole was warned it must make swift and thorough improvements.

Partly through media coverage and partly by word of mouth news of the PPI mis-selling scandal continued to spread. In 2010 PPI hit the headlines again, though, when the FSA announced new guidelines to protect customers. The guidelines included rules that would ensure lenders explained policy terms clearly to customers as well as emphasising the policies were optional. The British Bank Association was unhappy with the new guidelines and, as a consequence requested a high court review. The findings of the review were finally revealed in April 2011 when the court found in favour of the FSA.

The FSA’s victory is seen as a huge milestone in the story of PPI and it is expected that the number of claims submitted this year could be the highest yet. If you think you were mis-sold PPI, but have not yet made a claim mis sold PPI Barclays call out team on 0207 471 2000.

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