Mis-sold payment protection insurance claims get a boost

Dated:   

The Financial Services Authority has ordered banks and other lenders to compensate consumers who have been mis-sold payment protection insurance.

The FSA are clamping down on the top firms who have mis-sold payment protection insurance policies in light of evidence that some of the firms have been fobbing off justified complaints.

Jon Pain, FSA said: "All firms should take note and where necessary get their house in order."

Payment Protection Insurance Policies are designed to cover your loan repayments should you become ill or unemployed however it has come to light that many fall short in this area and many consumers were left with useless policies or indeed completely unaware that they were paying for a policy.

All firms who are responsible for mis-selling "single premium" PPI policies have been ordered by the FSA to look through their past sales (1 July 2007) and compensate their customers accordingly. If a considerable amount of problems are found then firms could be requested to open files as far back as January 2005.

The term "Single Premium" refers to policies where the entire cost of the insurance is added as one lump sum at the start of the agreement and repaid over the loan term.

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