Payment protection insurance is often sold alongside mortgages or secured and unsecured loans by financial institutions such as HBOS. However, it has come to light that there was an extremely high rate of mis-selling of these policies, with customers being encouraged to take out insurance for their loan repayments in case of sickness, accident or unemployment when, in reality, they would have been excluded from ever making a claim due to things like pre-existing medical conditions, or the fact that they were self-employed, for example. Moreover, some customers have been unwittingly paying for PPI, after it was added at the point of sale for their loan without their full knowledge.

The scale and context of the HBOS PPI scandal

If you have, or had, a loan or mortgage with HBOS, you may be due substantial compensation; often a full refund of all your PPI premiums plus interest. Since HBOS was, at its height, responsible for brokering 1 in 5 UK mortgages, the number of people who were potentially mis-sold PPI is significant. If you believe you could have been affected, we can help you seek redress.

HBOS as it existed from 2001 to 2008 (formed from a merger of Halifax Plc and Bank of Scotland) no longer survives in this form in the United Kingdom. After over-extending itself in the housing market and excessive reliance on the wholesale funding market, HBOS crashed out of life in September 2008, following in the wake of the collapse of Lehman Brothers in America. However, this didn’t mean it ceased to exist: Gordon Brown brokered the now infamous takeover deal by Lloyds TSB Group, with a £12.2 billion merger, closely followed by an embarrassing government bailout in October 2008, funding HBOS to the tune of £11.5 billion (Lloyds TSB with £5.5 billion and £20 billion for Royal Bank of Scotland).

Starting Your HBOS PPI claim

If you think you may have been mis-sold PPI by HBOS in the 2001-2008 period, you should not assume you can’t claim compensation. You can pursue claims against HBOS in the same way as for the other major lenders. Although HBOS now operates through three main businesses: Bank of Scotland, HBOS Australia and HBOS Insurance & Investment Group Limited, it has still earmarked a fund of £3 billion to meet claims for the mis-selling of PPI under its HBOS incarnation.

You can begin a claim directly by writing to HBOS, stating the relevant information about your policy, the grounds on which you believe it was mis-sold and requesting a full refund. HBOS must investigate your claim fully and in a timely manner. Those not wishing to deal with the claim themselves could use the services of a fee charging claims management company, though it’s always a good idea to research such companies fully before signing anything.