In 2006 The Consumer Action Group received a detailed complaint accusing Black Horse Finance of mis-selling Payment Protection Insurance (PPI).
The main allegation regarding the mis-selling of PPI was that Black Horse offered the client two entirely separate interest rates at the point of sale for the same loan. If the loan was taken with PPI the interest rate available was significantly lower than the interest rate on the loan taken without PPI.
Additionally the PPI was not explained in any detail and resulted in the customer later discovering that they were ineligible to make a claim for periods of unemployment as the policy did not provide unemployment cover for self-employed customers.
The consumer was never made aware of this condition and had expected that one aspect of the vendor’s job would be to check if the policy they were selling was appropriate for their needs. The customer was not asked about their employment status but presumed that the fact that they were self-employed would have been evident from the loan approval process.
Independent research conducted by Capital Blue found that more than 30 % of borrowers felt they were pressurised into buying linked insurance products with their loan.
Source: Consumer Action Group