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Top 5 UK Financial Mis-Selling Scandals – Mis-Sold Energy

£2.5 Billion Compensation For Mis Sold Energy Contracts

Mis-sold Business Energy ContractsThe UK is currently in the midst of a significant financial scandal involving the mis-selling of business energy contracts by unregulated and profit hungry energy brokers.

These energy brokers have been found to fraudulently mis-sell business energy contracts, leading to businesses paying considerably higher prices for their gas and electricity supplies each month.

The mis-selling often involves not discussing or  displaying the broker’s fee, not fully disclosing a breakdown of how the energy is priced, and enrolling the business in long-term supply contracts that may not be appropriate or suitable..

This scandal has been likened to other notable mis-selling scandals such as Payment Protection Insurance (PPI), car finance, pensions, and timeshare, which have rocked the financial sector in the past.

How Does Mis Sold Energy Compare with Other Mis-Selling Scandals

The scale of this scandal is enormous, with at least 15,500 compensation claims currently being pursued, and around £2.5 billion now at stake. This has led to comparisons with other significant financial mis-selling scandals.

Payment Protection Insurance (PPI)

The PPI scandal was one of the biggest ever seen in the UK. Millions of customers claimed refunds totaling over £38bn and banks and other financial providers were fined for their conduct. The mis-selling of PPI involved selling insurance policies to customers who did not need them or could not use them.

Car Finance

The car finance mis-selling scandal involved vehicle buyers being overcharged. Many customers were not fully informed about the terms and conditions of their finance deals, leading to them paying more than they should have. The Financial Conduct Authority has launched an investigation into this scandal and motor finance lenders fear the issue could cost them £16bn.

Pensions

In the late 1980s and early 1990s, a major pension mis-selling scandal occurred. As many as two million people were encouraged by commission-hungry financial advisors to switch from valuable occupational pension schemes to personal pensions. This scandal has affected thousands of people across the UK, with claim values of around £10 billion identified.

Timeshare

The timeshare mis-selling scandal involved customers being pressured into purchasing timeshares, with the commission-only salespeople also handling the loan application process. Barclays Partner Finance has agreed to repay the interest element plus another 8% thereon in respect of loans granted between April 2014 and April 2016.

Conclusion

The mis-selling of business energy contracts by energy companies and brokers is a significant issue that has affected thousands of British businesses. The scale of the scandal, with £2.5 billion worth of compensation claims in the pipeline, puts it on par with other notable financial mis-selling scandals. It serves as a stark reminder of the importance of transparency and fairness in the financial sector.

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