Banks face mass legal action over PPI mis-selling

Fri, 09 May 2008

Consumers that were mis-sold loan protection insurance are being asked to join a class action case which could result in compensation payouts worth more than £300m and bring other law suits against high street banks for the mis-selling of PPI .

The City law firm Clyde and Co is asking to hear from 163,000 people who were mis-sold personal payment protection (PPI) for loans by HFC Bank, a sub-prime lender owned by the high street giant HSBC .

If Clyde and Co proves successful in its lawsuit, it could signal a deluge of private compensation claims against other financial providers found guilty of mis-selling PPI, which is fast becoming one of the biggest scandals in the personal finance industry. Even though protection policies can help people who lose their jobs or become ill, up to half of the 20 million policies that exist are thought to have been mis-sold.

Many policy holders were wrongly advised that loans would not be given without insurance, or should have been told they could never have claimed because they were self-employed or had a medical problem.
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