Latest complaints data from the Financial Services Authority (FSA) has revealed an increase of 116 per cent in complaints caused by “advising, selling and arranging”.
96 per cent of these complaints (2.3m) were in relation to general insurance and protection products including the mis selling of payment protection insurance.
Payment protection insurance was mis sold to millions of customers who took out a loan or credit card. Common mis selling tactics included:
- Telling the customer PPI was a compulsory product
- Implying the customer’s loan or credit card application would only be successful if they agreed to a PPI policy
- Failing to ask about the customer’s medical history and/or employment status
- Simply adding the PPI policy to the credit agreement without the consent or knowledge of the customers.
It was originally estimated the payment protection insurance mis selling scandal would cost lenders around £9bn. However recent months have seen many lenders increase their provisions and, subsequently, the overall total for PPI compensation has now topped the £10bn barrier.