The FSCS (Financial Services Compensation Scheme) has declared that WFSL (Welcome Financial Services Limited) is in default after it admitted that it could not pay compensation claims linked to PPI (payment protection insurance) sales. This notice was added to the homepage of the Welcome Finance website, and stated the following:
“The FSCS has declared WFSL in default. This is because the firm is unable, or likely to be unable, to pay claims against it in relation to PPI. WFSL sold a substantial number of PPI policies to its customers, and a declaration of default opens the way for those customers, and any others who might have valid claims against the firm that are protected by the FSCS, to make a claim.
The FSCS will now be responsible for PPI claims against WFSL. To assist in its handling of claims, the FSCS has arranged to use WFSL’s claims handling resources. However, the FSCS will remain responsible for all decisions on claims, which will be made in accordance with FSCS rules, and will closely oversee and monitor all steps in the handling of claims. This arrangement will enable claims to be processed more quickly and efficiently.”
Only policyholders that were sold PPI on or after the 14th January 2005 are eligible to make a claim. Any customers wishing to claim back mis-sold PPI prior to this date will not be entitled to compensation. Anyone who has already submitted a claim for compensation for PPI which they think was mis-sold to them on or after the 14th January 2005 need not take any action, as their claim will be dealt with in due course.
The FSA recently appointed three more non-executive directors to the board of the Financial Ombudsman Service (FOS) as it prepares for a surge in PPI claims as the recent figure for PPI reclaims has risen in the last year by up to 40%.