There are many reasons why an individual may require financial litigation services to claim for financial mis-selling; anything from pensions to mortgages, car finance to insurance.
However, due to the current COVID-19 pandemic, a lot of speculation is being made about the potential for the number of financial mis-selling claims in the UK to increase. Due to the relief schemes the Government are implementing, there is real potential for people to be misled into products that they perhaps don’t need or to be caught out by terms and conditions they weren’t made aware of.
With thousands of people in the UK facing job uncertainty during the COVID-19 restrictions, either because of furlough or redundancy, the Government has implemented payment ‘holidays’; a scheme that gives an element of flexibility to homeowners to pause their repayments for the next three months. It has been suggested that one in nine homeowners will look to take up this offer.
But where does mis-selling come into this?
Whilst a seemingly attractive offer, it won’t be the best option for everyone but some may feel pressured into it or given incorrect advice. All lenders should be taking into account existing debts and current individual circumstances as well as highlighting all options available and outlining, in full, interest rates, the effect on your credit file and credit rating and other outcomes of using this scheme.
After the pandemic subsides, homeowners who take the ‘holiday’ will still be expected to pay this money back, whether this is through temporary higher interest rates or increasing their mortgage term.
COVID-19 may also reveal some worms in the woodwork for those with existing insurance policies; anything from private medical insurance to business insurance may come into play here.
This pandemic has caused many businesses and firms to have to close their doors temporarily as lockdown continues, meaning no money and a huge risk of redundancies and insolvencies. Usually, insurance policies will cover events that may risk a business’ livelihoods however, as noted by many, certain companies are refusing to pay out despite having a clause such as; “pay outs included in the event of a notifiable disease”. The argument being that COVID-19 is an unknown disease, therefore not ‘notifiable’.
The same may also potentially happen for those with any other type of insurance such as medical insurance, car insurance or even life insurance. This lack of clarity within the fine print may be tumultuous to many during and after the pandemic.
Other emergency financial loans
From 1990 – 2010, 64 million people were mis-sold PPI policies, policies which were designed to help cover repayments if you weren’t able to. However, many of these individuals were either pressured into this, there was inequitable client treatment or people weren’t aware of being signed up. Up until August 2019 more than £50m was paid out by the banks to reimburse those affected.
With further emergency loans being implemented to ease the burden of COVID-19, there’s speculation from many that these may incur the same potential issues. As highlighted by risk.net, “The emergency loans and relief packages being rolled out to firms and individuals affected by the coronavirus lockdown could come with a heavy price for banks: the risk of fines and lawsuits if they offer them to customers inequitably.”
Whilst COVID-19 is presenting some potentially life-changing challenges for many, it is important that you continue to research into your financial decisions before going through with them. After speaking to a financial advisor, don’t be afraid to dig a little deeper yourself and if need be, challenge those given recommendations.
If you have been mis-sold a product or service and are looking for advice or representation for your claim, Lysander Law have a team of experts on hand who will provide you with a personalised service to your claim. Contact us for more information.