Credit Compensation
In the UK the financial ombudsman deals with complaints about fiscal matters. It seems that one of the biggest topics of complaint has been about controversial loan insurance sometimes called PPI.
There’s now a whole industry springing up for credit compensation and credit repair solutions because there are so many complaints.
Something like 25000 consumer complaints have been registered, all relating to the possible mis-selling of PPI, or payment protection insurance. And with a possible credit claim against institutions they’re being scrutinised carefully.
Indeed a number of institutions have been fined for such mis-selling. The idea behind PPI is simple. It works to cover repayments on loans or credit cards if you can’t pay, either through illness, or unemployment, or a number of other causes.
To a prudent borrower that sounds very sensible. But in many cases lenders have been accused of mis-selling the protection. The Competition Commission discovered that in 2006 something like 1.4 billion pounds out of 3.5 billion pounds of insurance was actually “excess profit” for the institutions that sold them. That’s a lot of excess!
The FSA has said that they believe that financial services companies have been too slow to stop mis-selling PPI. With 1.4 billion pounds in “excess” profits it’s very tempting to speculate as to why.
One thing is certain, the number of people complaining is likely to grow as more people discuss the situation. And the first successful claims made will inevitably fuel the growth of more claims from other people who might have been affected.
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