Millions to be warned of misselling
MILLIONS of consumers will receive letters from lenders telling them they may be victims of the payment protection insurance (PPI) mis-selling scandal.
Between four and 12 million letters will be sent over the next year to customers who may have been mis-sold the insurance but are yet to complain about it, the Financial Services Authority (FSA) has estimated.
The watchdog has published proposed guidance over how the letters should be set out, saying they must be clear and jargon-free. Under FSA rules, lenders must write to customers in cases where systemic problems with how policies were sold were found, even though they may not have complained.
The FSA believes payouts as a result of this letter writing could eclipse the redress paid so far. In its guidance, the FSA said the letters should be clear, fair and not misleading, and include an explanation that the customer may have suffered financial loss and be entitled to money back.