This time last year we were all on a high thanks to the Olympics. They were an expensive affair but enjoyed by many. PPI, on the other hand, has benefited very few – unless of course you’re a banker.
Yes, the overall cost of the Payment Protection Insurance mis-selling scandal now exceeds £18.4bn, twice the cost of the Olympics.
Sadly one thing the Olympics and PPI mis-selling do not have in common is efficiency. The banks haven’t exactly been as speedy as Usain Bolt in dealing with the scandal.
PPI compensation costs time and money
Payment Protection Insurance is symbolic of everything that is wrong with the culture in our banks.
Three years on from banks going to Court to dispute their responsibility for PPI mis-selling (and eventually accepting defeat) the major banks still have to set aside more money. So, it’s taken longer to sort out this huge scandal than it took to build the Olympic stadium.
Banks and their senior executives have been in denial about the extent of mis-selling. Instead of facing up to their responsibilities, they said that when it came to PPI they were ‘on the side of the angels’. Others blamed customers for making fraudulent complaints.
Lloyds put more money in the pot
Banks have been fobbing off consumers for too long. Delaying and frustrating consumers’ complaints and requiring them to go to our financial champion, the Financial Ombudsman to get their complaint dealt with fairly.
The financial regulator is now promising to take a stronger line with the banks. We learned this morning that it is now taking enforcement action against Lloyds for failings in the way it has dealt with PPI complaints. Well, it’s certainly not before time.
The FCA should learn from the Olympic motto and take faster and stronger action against the banks and hand out higher fines. Lloyds has already been fined £4m for its poor PPI complaint handling, but it obviously didn’t have enough effect. Only action against senior executives will encourage them to change the culture within banking.