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FSCS invites protection claims against sub-prime lender

The Financial Services Compensation Scheme has invited customers of Welcome Financial Services to submit claims relating to protection sales.

Welcome was declared in default in March 2011 and until now the FSCS has been paying compensation to customers with payment protection insurance claims only.

Welcome was a subsidiary of sub-prime lender Cattles. Its main business was providing low value secured, unsecured and hire purchase loans to sub-prime borrowers at high levels of interest.

The FSCS says the firm sold a number of add-on insurance policies alongside its loans and PPI, which includes life insurance and critical illness cover.

In an update published this week, the FSCS says: “Customers of Welcome Financial Services are now able to submit claims to the FSCS in relation to advice on or the arranging of non-PPI and other regulated financial products.”

In October 2012, the FSA banned and fined former Welcome managing director John Blake for providing false and misleading statements about the quality of the company’s loan book.

Blake, who was managing director at Welcome between August 2007 and February 2009, was fined £100,000 by the regulator.

In March 2012 the FSA banned and fined Cattles finance director James Corr £400,000 and banned and fined Welcome finance director Peter Miller £200,000 for their roles in publishing misleading information.

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