The action for the 163,000 customers mis-sold loan payment protection by HFC Bank serves to fuel the debate on whether lenders should be allowed to sell this cover, says Burgess from independent PPI provider, British Insurance.
Clyde & Co is bringing a class action which is predicted to force compensation payouts of more than £300 million and herald the start of an avalanche of claims against other banks.
Such is the level of consumer discontent in the Payment Protection Insurance sector that the Financial Ombudsman Service is this year, handling an average of 2000 cases per month. It reports the steep increase has outstripped every other area of insurance and dwarfs the 1,832 cases it managed in 2007.
Burgess commented: "I believe at least half the 20 million policies purchased have been mis-sold 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."
