What Is a Mis-Sold Loan?
If a loan was brokered, that is sold by a party that is not the actual finance company that sold the loan, or there was a product such as Payment Protection Insurance (PPI) that was sold with the loan, then a commission will have been paid to the company that sold the loan. The law has now been clarified by case precedent, that if a commission has changed hands then it has to be fully declared by the Loan Company to the Borrower. The law states that these secret or undisclosed commissions are an act of fraud by the Lender, and renders those loans unenforceable or voidable. This enables the Borrower to make a claims for having been miss sold a loan, and compensation is payable by the Lender. If for example a bank has compelled you to take out PPI with a personal loan, the bank needs to declare the commission it received from the Insurer to you as the Borrower. If the Bank did not disclose, you have a claim.
