You've only got to look to the US - their job market deteriorated rapidly and the same will happen here. House prices are slumping, less is being spent in retail, profits are dropping and lay-offs will follow.
Braintree, Essex (PRWEB) May 16, 2008
News that City law firm Clyde & Co is seeking to secure compensation for the 163,000 customers mis-sold loan payment protection by HFC Bank is welcome and serves to fuel the debate on whether lenders should be allowed to sell this cover, says Simon Burgess from independent PPI provider, British Insurance.
Clyde & Co is bringing a class action which is predicted to force compensation payouts of more than £300m and herald the start of an avalanche of claims against other banks. Such is the level of consumer discontent in the Payment Protection Insurance sector that the Financial Ombudsman Service is this year, handling an average of 2000 cases per month. It reports the steep increase has outstripped every other area of insurance and dwarfs the 1,832 cases it managed in 2007.
Burgess comments: "I believe at least half the 20m policies purchased have been mis-sold and I'd like to see PPI removed from lenders' portfolios completely - it should only be available from independent providers who do not have a hidden agenda and do not resort to high-pressure selling tactics."
He continues: "I'm delighted to hear consumers are looking for recompense from High Street sharks who mis-sold the insurance, however, they should not turn their backs on this cover - just the lenders who are mis-selling it. When properly sold, PPI provides crucial financial assistance for those with loan obligations who suddenly find themselves faced with unemployment, or suffer an accident or sickness."
The Chartered Institute of Personnel & Development warns that the consequence of the economic downturn will be higher unemployment, a view shared by Burgess. "You've only got to look to the US - their job market deteriorated rapidly and the same will happen here. House prices are slumping, less is being spent in retail, profits are dropping and lay-offs will follow."
The Confederation of British Industry predicts 18,000 manufacturing jobs will go by Q2 this year, Experian says 40,000 financial services roles will be axed over the next three years, the British Chamber of Commerce suggests the economy will be worse than expected in 2009 and estate agency networks are reporting closures of up to 150 branches a week with already 4000 job losses since the start of the year.
Burgess concludes: "Although there is less spare cash to go round, those without PPI should get it. It can be sourced very cheaply via independent providers and will provide peace of mind, ahead of any redundancy announcements."