HFC Banks loan insurance compensation case launched
Thursday, 15 May 2008 17:27
Customers of HFC Bank who took out payment protection insurance (PPI) are being urged to come forward claim as much as £300 million back.
Earlier this year HFC – a division of HSBC - was fined a record £1.085 million by the Financial Services Authority for failing to take reasonable care to ensure that the advice it gave customers to buy PPI was suitable, and for failing to have adequate systems and controls for the sale of PPI.
The 163,000 customers who bought PPI with loans between January 2005 and May 2007 are now being urged to come forward to take part in a class action against HFC.
Julian Connerty, of law firm Clyde & Co, which is running the class action, explained those claiming money back could receive the amount the PPI policy cost them, along with interest – which could be as much as the same amount again.
He added that as the FSA has already ruled HFC was failing in the way it sold the policies – so those involved in the case will not have to prove they were missold policies individually.
However, the main factor holding back the group lawsuit, is that 500 people need to come forward.
Other options for those trying to reclaim money from missold PPI include going through the government-run
Financial Ombudsman Service (FOS).
PPI is sold alongside loans – offering to cover the cost of loan repayments if a customer falls ill and cannot work or loses their job.
However, PPI has come under the spotlight after people taking loans have been led to believe without the cover they will not get the loans. Also the insurance has been sold to those who would not be able to claim – such as the self-employed or people with existing medical conditions.
Simon Burgess, from independent PPI provider, British Insurance, said: "I believe at least half the 20 million policies purchased have been missold and I’d like to see PPI removed from lenders' portfolios completely – it should only be available from independent providers who do not have a hidden agenda and do not resort to high-pressure selling tactics.
"I’m delighted to hear consumers are looking for recompense from High Street sharks who mis-sold the insurance, however, they should not turn their backs on this cover – just the lenders who are mis-selling it.
"When properly sold, PPI provides crucial financial assistance for those with loan obligations who suddenly find themselves faced with unemployment, or suffer an accident or sickness.”
Anyone sold a PPI policy between January 2005 and May 2007 by HFC is urged to call 0207 623 1244.
Daniel Barnes