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First Plus payment protection

In 2008 First Plus took the decision to stop providing loans to new customers. For many years the lender had been regarded as a market leader with regard to secured loan. A secured loan is a loan which secured to some form of collateral, usually a house or a car. For many borrowers it is seen as a last resort when they are unable to obtain an unsecured loan elsewhere. This type of loan is controversial because it gives the lender the right to force the sale of the collateral if the borrower is unable to keep up with repayments. This means that a borrower could, ultimately, be forced to sell their home, for example, to repay their debt.

First Plus payment protection was also widely sold by the lender. Payment protection insurance covers a borrower if they are made involuntarily unemployed as a result of sickness, accident or redundancy by stepping in to cover repayments. This type of cover is obviously very attractive to any customer taking out a secured loan as loss of employment could result in the loss of their home. There are several issues connected with PPI, though, which have made it controversial these include the fact the cover can be expensive, can offer limited value and has been frequently mis-sold.

The cost of PPI can vary quite drastically. It is usually calculated as a percentage of the base value of the loan and can be anywhere between 13% and 56%. On a £20,000 loan, therefore, PPI may cost between £2,600 and £11,200. This figure is then usually added to the debt and will incur interest at the same rate as the rest of the loan. It is often worth customers carefully evaluating whether the PPI is worth the cost as it can significantly increase debt and the overall repayment period. Also the more expensive the cover the less likely it is that the customer will be able to recover the full sum of money they have paid in if they ever need to use the policy. In many cases a customer can find cheaper cover elsewhere. If the cost of your First Plus payment protection policy was not explained to you clearly this may be considered mis-selling and you may be able to make a claim.

Payment protection policies also commonly have a high number of exemptions meaning there are many circumstances that they do not cover. A 2008 survey by The Competition Commission found that just 15% of customers who tried to use their loan PPI policy received a payout. If the terms and conditions of your First Plus payment protection policy were not explained you could be entitled to make a claim for mis sold PPI.

The mis-selling of PPI has become a huge issue and has resulted in many payment protection insurance claims. So of the ways in which policies can be mis-sold have already been outlined above, but you may also be eligible to make a claim if you felt pressured into taking out the cover or you do not feel the cover you were sold was suitable for your needs.


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Belmont Thornton Limited is regulated by the Financial Conduct Authority in respect of regulated claims management activities; FRN:838450

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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* Belmont Thornton operates on a "No Win No Fee" basis. This means that there are no upfront costs to pay. Our fee only becomes payable on a successful outcome of a claim. A cancellation fee is payable if you decide that having instructed Belmont Thornton to act on your behalf, and after 14 days of signing your Letter of Authority, you do not wish to continue pursuing your claim with us. The cancellation fee is the reasonable costs incurred for the work undertaken. Please see our terms of engagement.

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