Store card holders could be in line for compensation
In the continuing controversy over the mis-sales of PPI – Payment Protection Insurance – by a number of lenders in the UK, it has been reported that many consumers that have been using store cards from major high street retailers could be in line for refunds and compensation due to the way that the payment protection insurance was sold, and the inappropriateness of a number of the policies that were sold to consumers.
 The move comes after one company that is the driving force behind many store cards linked to a host of leading retailers, such as Miss Selfridge, Debenhams, Mothercare, Asda, and B&Q, was hit with a hefty fine of over six hundred thousand pounds by the Financial Services Authority. The fine was imposed on GE Finance after the company was found to have mis-sold payment protection insurance to a wide range of consumers. This protection when sold on store and credit cards is also known as account cover or card cover.
According to investigations carried out by the FSA this type of insurance has been sold to many people that either cannot benefit from it or who simply do not need it. The purpose of the payment protection insurance is to cover the insured for a specified period for repayments in the event of situations such as accident, sickness, or unemployment. However, for many of the consumers to whom the payment protection insurance is sold this cover is both inappropriate and ineffective.
GE Capital Bank was fined by the FSA after the investigation concluded that consumers were not being given appropriate information about the payment protection insurance when it was sold to them, and in some cases consumers were even being provided with misleading information in order to try and sell the policies to them.
Tom Smith
2nd February 2007
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