In the News - HSBC

HSBC loan company hit by record fine for PPI misselling

A member of bank group, HSBC, has been fined a record £1.1m fine for misselling Payment Protection Insurance (PPI) to its loan customers. PPI policies are designed to protect borrowers from interest payments should they, for example, lose their jobs. However, HFC Bank, which predominantly lends to people with a high credit risk, was found to have sold many PPI policies to people who would have been ineligible to claim in any event. So small were HFC's pay-outs, it is believed that it kept as much as 80% of its premiums, making it one of the most lucrative forms of insurance for banks.

It is expected that other banks will also be effected by this news as customers claim back what they believe to be wrongly charged premiums. Personal finance website, moneysavingexpert.com, says that customers have already downloaded nearly 200,000 pro forma letters demanding refunds.

(Sources: Independent Times Online Guardian Unlimited Telegraph.co.uk)

Posted by Plebble Admin at 10:01 on 17-Jan-2008