Citizens Advice Scotland says the decision by Lloyds to set aside £3.2bn for repayment of Payment Protection Insurance (PPI) is a sign that the industry knows the recent High Court ruling has to be taken seriously.
On 20 April the High Court ruled that banks who had mis-sold PPI would have to pay compensation.
CAS Chief Executive Lucy McTernan said today,
“The High Court decision was a major victory for consumers and for fairness. Businesses who trade unfairly should not be able to get away with it, whoever they are.
“If the major banks are now setting aside money for this, that shows they have accepted that the High Court ruling is real, serious and cannot be ignored or negotiated away. And they are right.
“For years CAB advisers have dealt with people who felt they had been nowhere to turn after being unfairly treated in this way – many of them vulnerable people on low incomes (see examples below). Now, at last, such people will have the right to re-claim this money.
“Anyone who feels they have been mis-sold PPI should get advice on how to proceed. As ever, CAB advice is free, confidential and completely impartial.
“As for the banks, the message is very simple. If you don’t want to pay compensation then don’t mis-sell your services.”
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CAB Case Evidence
Scottish CAB advisers helped clients with nearly 1,400 issues relating to Payment Protection Insurance (PPI) last year. Many of these issues concerned mis-selling of policies, which has been a high profile problem in the last few years. Some recent examples of Scottish CAB cases are given below:
- A client was told that she had to take out payment protection insurance on a loan despite being a long term Incapacity Benefit (IB) claimant. The client now wants to claim back over £900 in insurance payments.
- A client reports that she was mis-sold payment protection insurance by her bank. The client was unemployed at the time of taking the loan due to back problems, but was encouraged to take out insurance. The client subsequently attempted to make a claim on her insurance when her condition worsened, but the insurance company turned down her claim, stating that the client had been mis-sold the policy by her bank. The bank has refused to take any responsibility for the policy.
- A client took out a personal loan for £600 and was encouraged to take out insurance, despite the client informing them of a pre-existing condition. The client was made redundant in 2007 and was advised by the creditor to refinance the debt over a seven year period. The client now owes nearly £4,500 on the original loan of £600. The client has been diagnosed with cancer, but the creditor has advised him that he has no insurance cover for this as it was the result of his pre-existing condition.
- A married couple were offered a consolidation loan after advising their bank that they were experiencing difficulties repaying their overdraft. The clients had an overdraft of £3,546 which they felt unable to repay. At the time, both clients were under considerable stress and did not fully understand the nature of the agreement. The loan included payment protection insurance cover of £1,281 which was not required as neither of the clients are able to work, a fact the branch manager was aware of. The clients now have a debt of over £8,600, an increase of nearly £5,000 on the original debt.