Firms were responsible for £61m of total £61.4m levied by FSCS last year
The recent explosion in brokers’ Financial Services Compensation Scheme (FSCS) payments stems from the failure of just five firms, according to an FSA letter seen by Insurance Times.
It says that the claims it is handling over mis-selling payment protection insurance (PPI) by general insurance intermediaries arise from five intermediary firms. Alongside Picture Financial Services, named in Insurance Times last week, the letter identifies APS Mortgages, Dean House Financial Services, Loanmakers and Twopart.
PPI mis-selling claims accounted for £61m of the £61.4m total levied on general insurance intermediaries by the FSCS in 2009/10. The sharp rise in the scheme’s levy has sparked Insurance Times’s Fair Fees protest.
The five firms identified have all gone into default with the FSCS, so are unable to pay out compensation claims against them. Loanmakers, a secured loan brokerage, is linked to 553 PPI mis-selling claims to the FSCS. An FSCS official said that 78% of claims against Loanmakers had been settled, 97% of them resulting in a compensation offer.
Companies House records show that Loanmakers was wound up in May. It defaulted on the FSCS in September 2009.
The FSCS has received 234 claims relating to PPI policies sold by debt and loan consolidation services firm Twopart, which was dissolved in October 2009. The scheme has also received 328 and 74 claims for APS and Dean House, respectively.