Will the PPI Scandal Change Anything?
The PPI mis-selling scandal has created a situation that the City never thought it would find itself in – being held to account by its customers in such a way that their profits are being hard hit.
Claiming compensation for mis-sold payment protection insurance (PPI) is something that many thousands of people have already done – and there are thought to be plenty more people yet to make a claim.
With the possibility of a 2018 PPI deadline on the horizon, how has the British banking industry changed? Has it?
The regulatory body
Back when the PPI scandal first broke all those years ago, the banking regulator was called the Financial Services Authority (FSA). Although it did great work on a daily basis, it was described as a regulatory authority ‘without teeth’. In other words, it could make recommendations… and nothing much more.
This became all too apparent during the process of deciding, by law, if PPI had been mis-sold to people. The FSA was effectively powerless and toothless to stop it, change it or prevent it. The UK Government realised this had to change.
The Financial Conduct Authority has more regulatory powers, superseding the FSA some two years ago. It had been instrumental in placing pressure on banks and lenders to not only compensate, and to do so correctly but to also start the processes of getting customers to trust banks again.
The FCA is currently looking for a new Chief Executive and is now far more conciliatory in tone which means that although the pressure is still on banks to end the PPI mis-selling debacle in the right way, they want to move on from what is now seen as a very embarrassing episode in British banking history.
The one major issue with PPI was how it was sold to customers and why this happened.
As you would expect, it all came down to money. In this case, it was two-fold:
- Profit – banks made huge profit on every PPI policy they sold thus, they gave their sales teams targets and sales goals to meet. This meant that their profits were significantly boosted by PPI.
- Commission – this is where an individual received an extra payment for every PPI policy they sold. Along with sales targets, representatives knew that by selling lots and lots of policies, their monthly salary would be significantly boosted.
Needless to say, neither of these two facts were divulged or shared with the customer.
To time to make your claim for PPI compensation is NOW – call Payment Protection Scotland today.