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Norton Finance and Norton Insurance Services placed in administration

Norton Finance and Norton Insurance Services have both been placed in administration due to the volume of payment protection insurance mis-selling claims.

The firms had set aside £2.2m to deal with PPI claims and Sarah Bell and Philip Duffy of Duff & Phelps were appointed as joint administrators of the companies on February 7 2012.

The companies are subsidiaries of the Norton Finance Group which continues to trade profitably and is unaffected by this process.

A pre-pack saw another company, Norton Finance and Mortgages, buy the assets of the two insolvent firms from administration.

The firm operates out of the same building in Rotherham and will retain all the staff of the previous company.

Norton Finance Group claims all creditors will be paid and the administrators are in the process of contacting them.

But the firm admits the PPI liabilities will be dumped on the FSCS.

Keith Stringer, director of Norton Finance Group, says: “It is with reluctance we have had to close these two companies as they traded successfully for 38 years until the regulations surrounding selling of PPI changed retrospectively last year.

“However I am pleased to announce that NFM has acquired the business and all employee positions will be protected. We look forward to continuing to work with all existing introducers and partners.”

The joint administrators are currently reviewing the PPI claims liability of the Companies and are in dialogue with the Financial Services Compensation Scheme.

The FSCS is the compensation fund of last resort for customers of authorised financial services firms and is funded by a levy on financial services firms.

If the firms default on their liabilities then the FSCS will pay affected customers through the industry fund.

As a consequence of the appointment of joint administrators there is a moratorium on legal process.

This means that all consumer PPI claims have been stalled and no new ones can be initiated without the written consent of the joint administrators or an order from the High Court.

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  • thomas montgomery 1st August 2013 at 9:10 am

    I am told I cant claim PPI if it was before 2005, yet I was charged £5000 for the total cost of the ppi policy even though I only had the mortgauge for a year and sold the house. Can I make a claim in court still for this.

  • terri newman 23rd June 2012 at 10:10 am

    i would like to now when norton are going in to default as i,m awaiting for my ppi to be payed out and i have been for some time now it has been cleared by the fscs so it,s the waiting game . so if can any one please tell me when they are going in to default please

  • terri newman 23rd June 2012 at 10:10 am

    i would like to now when norton are going in to default as i,m awaiting for my ppi to be payed out and i have been for some time now it has been cleared by the fscs so it,s the waiting game . so if can any one please tell me when they are going in to default please

  • martyn 21st June 2012 at 3:54 pm

    This is a disgrace, Norton added 3k to my secured loan at outset when I was self employed. I can’t claim due to timescale .the parent co. Should take full responsibility

  • Steve 23rd May 2012 at 4:50 pm

    The FSA certainly need to investigate this as the company received hefty commissions from the sale of PPI over many years so why this is suddenly dumped on the FSCS whilst others areas of the group are “profitable” beggars belief.

  • Dave 29th February 2012 at 1:40 pm

    I wholeheartedly echo the other comments.

    The FSA and the OFT should investigate this immediately and prevent the Norton Finance Group from simply taking all the profits and then dumping the liabilities (via the FSCS levy) on individuals and firms who never sold a single one of these unsuitable PPI policies.

    Norton knew what it was doing when it sold these contracts. The principal reason for selling single premium polices was for the excessively high commission they received (around 70% of the premium).

    I hope the correspondent above who suggested the BBC should investigate has actually tipped off the Panorama programme.

  • Ancient Wisdom...is a mortgage broker in N3 29th February 2012 at 1:36 pm

    This is a surprise as we have comne across many clients who have taken out secured loans with Norton, usually being charged 1-3% of the loan for the facility!

  • David Smith 29th February 2012 at 9:57 am

    I agree this is nonsense. I know of a firm who sold PPI with every loan and mortgage through lenders such as Igroup. When the PPI scare mongering started they simply closed the business down, no administrators or liquidators as the company was cash rich, just closed it down. They now write business via an IFA based in their offices, they themselves write commercial business and when they receive PPI claims they reply to the claims firms stating that the firm has closed down and enclose a copy of the company house register as proof. I think that the protection from creditors provided by being a limited company should not apply in financial services as it was the directors who were responsible for the mis-selling in the first place. Surely these same directors would have given personal guarantees to their bank in respect of any borrowing the company undertook so therefore FSA should insist on the same type of arrangement in respect of compensation claims.

  • Flo 29th February 2012 at 8:47 am

    Irreprehensible behaviour

  • howard slinker 28th February 2012 at 11:15 pm

    This position that norton finance have taken on ppi is an disgrace, there should be a law against dumping all the ppi claims onto the FCSC.
    And this is legal……….

  • CRAIG MENNIM 28th February 2012 at 6:20 pm

    Levy the government to stop the ability to Phoenix once and for all!

    In all business too, not just financial services. These are the edge of the law criminals who seriously affect the economy. Esther Rantzen first highlighted this scandelous practice in the 70’s. Four decades later, where are we…?

  • colin liddle 28th February 2012 at 5:11 pm

    Is this what the BSCS is for ?
    Wow !

  • Kevin Vella 28th February 2012 at 3:58 pm

    Alternatively put,
    Been making a fortune for 38 years on the back of un-needed lump sum ASU. Times are changing and I’m not compensating anyone, the FCSC can do that on my behalf, now let me get back to work. Now what can I call the new company… Norton Finance will do.
    I bet the banks are thinking, now why didn’t we think of that!

  • Roger Kirby 28th February 2012 at 3:37 pm

    I hope the FSA will look into the culpability of the approved persons in this debacle.

  • Andrew Carter 28th February 2012 at 3:27 pm

    I agree with the comments above what is the point of the FSA making judgements om mis-selling if they will allow companies to go into administration, knock the compensation, and start all over again.

    At the very least the new conpany should be refused FSA permissions.

    I bet if I closed my mortgage brokerage down owing thousands of pounds in compensation claims I wouldn’t get permission the next day to start again!

  • Roger Kirby 28th February 2012 at 3:20 pm

    Looks like this is a phoenix company rising from the ashes. Should be good for a BBC investigation! Perhaps the FSA would take some interest too.

  • Kevin 28th February 2012 at 3:13 pm

    Isn’t this just Phoenixing!!! Come on FSA step in and sort this out.

  • KEvin 28th February 2012 at 3:13 pm

    Isn’t this just Phoenixing!!! Come on FSA step in and sort this out.

  • craig 28th February 2012 at 3:00 pm

    FSCS wont go for this anyway, and FSA specifically commented on such activity over the last couple of years. Norton are the parent group and as such are liable for the compensation. This is basically a phoenix operation otherwise which is now prohibited in terms of directorship

  • craig 28th February 2012 at 3:00 pm

    FSCS wont go for this anyway, and FSA specifically commented on such activity over the last couple of years. Norton are the parent group and as such are liable for the compensation. This is basically a phoenix operation otherwise which is now prohibited in terms of directorship

  • John Crescens 28th February 2012 at 1:03 pm

    Absolutely outrageous and scandalous.Mr Stringer has been in this industry far longer than most.One suspects his lifestyle will not be affected by any levy increase.Whilst noting no job losses within Norton will the levy increase cause others to reduce headcount or even fail.

  • max 28th February 2012 at 12:01 pm

    this is not on, my hit for the FSCS levy will increase due to these peopel scarpering after ripping people off for years with useless and unneeded PPI, even SPASU. how much money did mt stringer and his fellow directors, and predecessors, make out of these in the good times, when those who knew they were a bad idea will pick up the bill for it.

    scandalous.