Welcome creates £110m fund to compensate for mis-selling
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Welcome Financial Services has set aside £110m to compensate cus-tomers who were mis-sold payment protection insurance by the firm.
Welcome has agreed a scheme to restructure its debt which will see it bought by specially-created com-pany Bovess.
It has been declared in default by the Financial Services Compen-sation Scheme because the firm is unable, or likely to be unable, to pay claims against it in relation to PPI.
But as part of the restructure it has come to an arrangement with the FSCS to compensate those mis-sold PPI.
Customers who took out a PPI policy with the firm on or after January 14 2005 can make a claim through the FSCS.
A spokeswoman for the FSCS says Welcome has given it £50m and is due to hand over a further £40m as redress, but the end sum could be higher.
Welcome has also established a trust fund of £20m as redress for customers sold pre-regulated pol-icies before January 14 2005, which the FSCS does not cover.
The firm is assisting the FSCS in its handling of the claims and has applied to the Financial Services Authority for a variation of its permission to do so.
The sub-prime lender, part of Cattles Group, stopped lending in 2009.
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