The Financial Services Compensation Scheme (FSCS) declared Welcome Finance in default on the 2nd March.
This means that the FSCS felt it was satisfied Welcome was unable, or likely to be unable, to pay claims against it in relation to payment protection insurance (PPI).
Welcome sold a huge amount of PPI policies to its customers, and its 'default' opens the way for those customers to bring a claim directly to the FSCS for compensation.
In an unprecedented decision, Welcome will assist the FSCS by providing cash and resources to deal with any future or ongoing cases. The move is a positive and considered step by the FSCS to allow it to process claims efficiently by having access to Welcome's records. We are keen to advise any clients who have a loan with Welcome that they should approach us without delay so we can deal with their case. Although Welcome is officially no longer trading, aside from a couple of changes, we can still claim compensation.
There are some other reports this week showing Lloyds losing £70 million per year following their decision to stop offering PPI on their accounts. However, the bank still returned to a healthy £2.2 billion pound profit last year after a £6.6 billion loss in 2009. No doubt they will find another product to replace the profitable insurance !
Finally, the ABI made comment this week on Ombudsman case fees. Each FSA regulated business must pay the Ombudsman £500 per case when it reviews a complaint. This means that companies like Lloyds are providing a huge amount of funds to FOS to cover its operating costs. The ABI is calling for claims management companies to contribute to the Ombudsman's costs as they are somewhat responsible for the influx of PPI claims. I believe much of the reason for the increased costs comes from the manner in which some banks have chosen to deal with cases after the Judicial Review was announced in October 2010. The industry is always keen to work with FOS to alleviate any pressures and to ensure cases are dealt with as efficiently as possible.
If you think you have been mis-sold Payment Protection Insurance Policy, do not hesitate to contact us via http://www.ppireturn.co.uk/
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