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Welcome payment protection

If you have taken out payment protection cover or loan insurance from Welcome and you believe the cover was mis-sold to you, you may be unsure how to proceed with making a claim. In March 2011 Welcome was declared to be in default. Default is a term used when a Financial Service Authority regulated business is financially unable to settle claims made against them. In these cases the complaints are dealt with by The Financial Services Compensation Scheme (FSCS) who will investigate complaints and pay out compensation as necessary. This means if you make a Welcome payment protection claim it will now be investigated by the FSCS.

The news that Welcome were in default was not an unexpected one. In 2008 the company recorded pre-tax profits of £745 million and in 2009 the company announced its debts exceeded its assets by £1.1 billion.

For many years Welcome was well known for providing loans to customers who had a poor credit history. The company faced significant criticism for the charges it applied for these services which could be up to 85% APR. The lender was accused of preying on the most financially vulnerable and causing customs to fall into spiralling debt.

For many years lender also made healthy profits from selling Welcome payment protection cover. PPI is designed to protect a borrower by covering their debt repayments should they become involuntarily unemployed. Given the high rate of APR attaches to many of their loans this would clearly be an attract prospect to many of Welcome’s customers. In reality serious questions have been raised regard the level of protection provided by all types of payment protection. What is undeniable is that lenders made huge profits from selling the cover with some suggesting it was sometimes more profitable than the interest from the loans to which it was attached. This is largely because the payout rates for this type of insurance are so low. The Competition Commission found in 2008 that just 15% of people who tried to use their loan PPI policies were successful in doing so.

Following a 2006 investigation by The Financial Services Authority and The Office of Fair Trading the public became increasing aware of the issues surrounding this type of insurance cover and sales began to fall. At the same time complaints from unhappy customers rose dramatically as more and more customers demanded compensation. This situation squeezed many lenders, such as Welcome, who had relied on PPI for a huge chunk of their income.

In 2010 Welcome was the fourth most complained about insurance company according to figures released by The Financial Ombudsman. In 93% of cases the Ombudsman ruled in favour of the customer showing significant issues with the way Welcome payment protection has been sold.

If you would like to make a complaint against Welcome we can help. We work on a no win no fee basis* and have already helped more than 60,000 customer for more information call our claims team on 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.

Belmont Thornton Limited is registered with the Information Commissioners Office. Registration number Z1728023.

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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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