Loans lenders under the competition commission’s spotlight
Loan lenders throughout the UK may soon find themselves in some very hot water with the competition commission, if it is proven that they have accumulated profits through the unfair selling of payment protection insurance (PPI).
It has been revealed that privately held loan lenders as well as many publicly traded high street banks and financial institutions may have profited to the tune of billions over the past few years through the misrepresentation of PPI.
Representatives fighting in the corners of British lenders have warned that should changes in the ways in which PPI is currently sold be put into place, it is likely that interest rates on the actual loan products themselves will rise in response. Many lenders have argued that they are only able to keep the cost of their products down by balancing any potential shortfalls through the sale of PPI. If this facility is withdrawn and PPI is sold privately the equilibrium will be lost and the margins will be made up on the loan products.
It is thought that millions of people throughout the UK who have been sold loan insurance over the last 5 years may be eligible to make a claim against their lender. Analysts speculate that the cost of this action has the potential to be valued well into the billions.
