The first wave of successful settlements for mis-sold loan Payment Protection Insurance claims are hitting the courts. These offer relief for consumers who claim they were sold a loan PPI that offered no value. The market, worth £5.5bn in annual premiums, is buried under claims of widespread mis-selling.

Consumer groups have long claimed that companies are giving customers a hard sell of a product that can’t help them. Loan payment protection insurance is supposed to provide the borrower with financial security in the event of illness or job loss.

Conkers, a subsidiary of endowment claims company Brunel Franklin, won the first PPI case settled. They won nearly £12,000 for their customer after bringing forward a case for mis-selling. Conkers believes that 30m people have a PPI mis-selling claim.

Oasis Financial’s Simon Hatch says: ‘Many people are not even aware that they have PPI. We expect to see the number of people claiming to rise rapidly.’

Oasis Financial, which relies on cold-calling, won 30 compensation cases for consumers mis-sold PPIs, including some who were unemployed or had medical conditions that prevented them from claiming.

Companies are encouraging consumers to settle their claims through them, but experts say victims should take their case to the Financial Ombudsman Service.

Pula Houghton, spokesman for consumer watchdog Which?, says: ‘There is no need for consumers to go to a claims firm. It is simple for borrowers to take their case to the FOS themselves.’ More than 40% of PPI cases brought to the Ombudsman are upheld and there seems little difference in success between claims made through specialist firms and those made directly.