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In 2008 Egg was fined £721,000 in relation to failings regarding the sale of payment protection insurance. An investigation by The Financial Services Authority (FSA) found issues with around 40% of Egg PPI sales made between January 2005 and December 2007. It was found staff were over-emphasising the positive features of the payment protection cover and in some cases were continuing to try and persuade customers to take up the cover even after they had asserted they did not want or need it.

The FSA’s investigation into Egg PPI sales was part of a wider investigation into the sale of Payment Protection Insurance which began back in 2006. The investigation was prompted by numerous complaints regarding the way the insurance cover was being sold by many banks, building societies and brokers. The FSA found many issues and reprimanded a number of major lenders and smaller brokers. In many instances the issues centred on a failure to introduce suitable internal processes to adequately protect customers from mis-sale.

Since the FSA’s investigations most lenders have radically changed their approach to selling PPI and many have stopped selling the cover all together.

Egg PPI is not an intrinsically bad product and for many customers it can provide a useful financial safety net. Like all PPI; however, it has a significant number of exemptions meaning it is not suitable for everyone. Many PPI policies, for example, do not cover customers over the age of sixty-five. The cover is also designed to cover repayments in the event of loss of employment meaning it is not usually suitable for a customer who is retired or in full time education.

Unfortunately, some lenders offered Payment protection cover to all customers without full evaluating their suitability. In some cases this was due to a lack of staff training and product knowledge meaning sales representatives didn’t realise PPI couldn’t cover everyone. Some have also suggested that many salespeople were influenced by high rates of commission which were sometimes offered. Whatever the reason, it is estimated that as many as two million policies may have been mis-sold across the UK.

If you have been mis-sold a policy you may be entitled to make a payment protection claim and to claim PPI refunds from your lender.

If you are unsure whether your Egg PPI policy was mis-sold you should think about the information you were given and the advice you received at the point of sale. If you were given inaccurate information or feel you were mislead in anyway your policy may be considered mis-sold. Likewise if you were sold a policy that you didn’t want or need or that your circumstances made you unsuitable.

Before being sold you policy your lender should have explained the full terms, conditions and costs of the policy. You should have been asked questions regarding your circumstances to evaluate your suitability and you should have been given time to make a decision and not felt rushed or pressured in any way. If you feel your lender failed you in some aspect of the sales process you have the right to make a claim. For more information call 0207 471 2000.

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Belmont Thornton Limited is regulated by the Claims Management Regulator in respect of regulated claims management activities; our registration is recorded on the website number 18273

Belmont Thornton Limited is incorporated in England and Wales, Company number 6621233, whose head office at Unit B11, Kestrel Court, Harbour Road, Portishead, Bristol, BS20 7AN and registered office at Harwood House, 43 Harwood Road, London, SW6 4QP.

Belmont Thornton Limited is registered with the Information Commissioners Office. Registration number Z1728023.

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