A county court judge has told a lender that it cannot demand payment of an £8,000 debt, possibly paving the way for thousands of borrowers to default on repayments.

Judge Jacqueline Smart at South Shields county court has ruled that the MBNA credit card company cannot demand that a customer repay her debt. The company tried to force Lynne Thorius to repay the £8,000 she owed on her card.

However, Judge Smart decided that there had been an unfair relationship between MBNA and Ms Thorius because of the way in which the firm sold her payment protection insurance.

The credit card was sold to Ms Thorius in the official Sunderland Football Club shop in 2002, along with payment protection insurance, which is designed to cover debt repayments in case of illness or redundancy.

(more…)

The Financial Services Authority has told banks and building societies to compensate customers who may have been mis-sold payment protection insurance.

The ruling covers firms that have sold more than 40% of their “single premium” PPI policies at the same time as giving unsecured personal loans. The FSA will also target other companies that have mis-sold PPI when offering secured loans or credit cards.

The regulator has asked firms to reopen 185,000 rejected complaints about PPI.

Payment Protection Insurance is designed to cover debt repayments if you can’t work because of illness or redundancy, and is usually offered whenever you take out a loan, mortgage, credit card or store card, or bought something on credit.

(more…)

59% of all complaints made by customers against financial firms were upheld by the Financial Ombudsman Service (FOS) in the first half of 2009.

The FOS deals with complaints from customers when firms are unable to settle them themselves.

Over half the complaints registered by the group concerned the top five High Street banks - Lloyds Banking Group, Barclays, RBS-NatWest, Abbey and HSBC.

The FOS has taken to “naming and shaming” banks which receive a large number of complaints in order to force the companies to resolve more issues themselves.

“We have already been providing comparative complaints data on a private basis to the larger financial businesses - but this has led to no improvement in the standard of complaints handling by the worse-performing businesses,” said Walter Merricks, the outgoing chief ombudsman.

(more…)

Football fans who plan on attending the World Cup Finals in South Africa next year have been urged to purchase travel insurance early to cover themselves for any cancellations.

M&S Money said that many travellers need to use insurance before their holiday begins in case their flights or accommodations are cancelled unexpectedly. The insurer’s premier travel insurance policy offers up to £6,000 cover for any irrecoverable unused travel and accommodation costs in the case of illness, being called for jury service or if eave is withdrawn for customers working in the emergency services or Armed Forces.

Steve Price, M&S head of general insurance, said: “It’s great news that England have qualified for the World Cup and thousands of fans will now be looking forward to heading to South Africa next June.

“Tickets for the matches will no doubt be hot property, but fans should also think about what they would do if the worst happens. Travel insurance can provide financial support long before you step on to a flight, so England fans would be wise to invest in a comprehensive policy now.”

(more…)

One in seven motorists has lied to their car insurance company in order to reduce premiums, a new survey has revealed.

According to research by insurer Salaam Halal, some 14% of drivers admitted that they or their partner had deliberately submitted false information in order to benefit from cheaper insurance.

The worst culprits came from Wales, where 21% of drivers admitted they were likely to lie when applying for insurance. People living in the East of England were most truthful, with only 10% of motorists providing false applications.

People most commonly lied about the location of their car when applying for insurance, with 39% of those who had been dishonest claiming they parked their car in a garage, when in fact they kept it outside.

(more…)

Barclays has lodged an appeal against threatened limits on the sale of the controversial Payment Protection Insurance (PPI).

PPI is supposed to cover loan repayments if the holder is unable to work due to an accident or illness or if they lose their job.

In January the Competition Commission passed a ruling to prevent lenders from selling PPI alongside credit cards, loans and mortgages from October 2010. Instead they must wait seven days before contacting customers to sell them the cover.

In March Barclays lodged an appeal against the ruling, which is currently being heard in court. The bank argued that the ban is not justified by the evidence collected as part of the Competition Commission’s investigation.

(more…)

A fifth of young motorists are driving without car insurance, a new report from the Motor Insurance Bureau (MIB) revealed today.

The MIB, which is funded by the motor insurance industry and pays compensation to those involved in an accident with an uninsured driver, estimates that around 243,000 drivers aged between 17 and 20 are uninsured.

The report found that one in 10 young drivers claim not to know that motorists must purchase car insurance by law. However, this group poses a particular danger on the road, because young people are 4 times more likely that average to be involved in claims.

(more…)

Fake injuries, fictitious stolen goods and exaggerated claims for car repairs are all ways in which policyholders attempt to defraud their car insurance provider, according to Admiral Insurance.

The FTSE 100 company is the latest insurer to warn that it has seen a significant increase in fraudulent claims from individuals and criminal gangs in the first half of the year.

David Stevens, Admiral’s chief operating officer, said that the company had received “roughly a third” more suspicious claims during the period than in the first half of 2008. He added that Admiral, which specialises in car insurance, had discovered several instances of false or exaggerated claims such as fake whiplash following minor prangs, as well as policyholders lying about the number of people they were driving in their car at the time of an accident.

(more…)

The Foreign & Commonwealth Office (FCO) has urged British holidaymakers to make sure they are covered by travel insurance to avoid racking up crippling medical bills abroad.

3,146 Britons were hospitalised and 5,659 died abroad between April 2008 and March 2009, in the top 20 countries where British nationals needed help from the FCO.

As a proportion of the number of visitors to a country, British tourists were most likely to be hospitalised in in Thailand, followed by Greece, Egypt and India.

The FCO said that the biggest causes of being hospitalised were drink related incidents, such as falling off a balcony, and moped and motorbike accidents.

(more…)

Holidaymakers are being warned to check the small print on their travel insurance policies, as it emerges that many insurers do not cover expenses resulting from swine flu in their products.

According to the Rock insurance company, many insurers exclude important areas of cover from their standard insurance policies, including pandemic illness and terrorism – particularly worrying in the light of the swine flu pandemic and the Majorca bombings.

“With the current levels of infection in the UK, it is important that you offer an insurance policy that includes comprehensive cover should [customers] contract the illness either before or during their holiday,” said a spokesman.

Insurer Aviva has already received 400 claims relating to swine flu this summer.

(more…)