Consumer set to receive compensation from banks

The High Court ruled earlier this year that consumers who have been mis-sold payment protection insurance by their banks have the right to claim compensation from them.

The court concluded that as widespread complaints had been received about the insurance having been sold to numerous consumers who could not actually claim under it, the banks should pay back any premiums paid under the policies by such people, plus interest.

Consumers should check their mortgage, credit card and loan documentation to see if they were sold the product as it will not always have been drawn to their attention by the banks.  Mis-selling will have occurred if the insurance was sold to people who were unemployed, were off work on medical grounds or were older than the upper age limit on the policy.  It will also have been mis-sold if it was sold as part of a 'single premium' policy and no refund was given when the loan was cancelled or repaid early, if the cost of insurance was not detailed separately or at all, if major terms and conditions of the policy were not explained, if the bank failed to explain that the policy was not needed as the consumer already had alternative cover in place and/or if you didn't know or agree to buying the insurance.