Influx of compensation claims puts firm into administration
by Luke Whitmore, 25th May 2011
The parent company of an insurance broker which primarily sold
PPI (Payment Protection Insurance) has gone into administration
after an influx of complaints from consumers over PPI
mis-selling.
Wilmslow Financial Services - which previously operated a loan
broking business known as Freedom Finance - had been struggling to
deal with their accumulated PPI complaints, after a court ruling
placed the onus on lending institutions to compensate their
customers for mis-selling them the controversial loan
insurance.
Despite having sold off their loan business last year, the firm
had not been able to cope with the influx of PPI claims from
borrowers who had taken out loans previously. Insolvency firm MCR
are handling the aftermath, with Phil Duffy and Sarah Bell from
their Manchester office named as administrators.
The systemic mis-selling of PPI has affected the majority of
lenders, from the big banks to smaller businesses such as Wilmslow
Financial Services. PPI, a type of insurance often offered
alongside loans, was intended to grant borrowers additional
financial security by paying out if they should experience a loss
of income, thus allowing them to keep up repayments. However, it
was widely sold to people who had no use for it, could not use or
even did not know they were paying for it.
The Financial Services Compensation Scheme (FSCS) has said that
they are looking into how they can help those who have lost out
through their dealings with Wilmslow. They have asked customers not
to contact them, but stated that it may ultimately be possible for
borrowers from the firm to receive 90% of any eligible claim in
compensation.
The high street banks are facing severe staffing issues coping
with the deluge of complaints - with reports that many are hiring
on thousands of staff and transferring experienced employees from
other departments in order to clear the backlog.
If you were mis-sold PPI from Wilmslow Financial Services or any
other source, we can help you make a PPI reclaim.
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