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PPI scandal costs twice as much as the Olympics

Two bankers with briefcase

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.

Comments
Profile photo of jimbo123
Member

Hi can any body tell me if you can claim anything back on the cost of borrowing money on your credit card thanks

Member
Jim says:
2 August 2013

Why should all taxpayers pay for the PPI claims made to the banks owned by the state, when many of us had the sense to see that the policies were no good ?

Profile photo of jimbo123
Member

Mr Camerons lot to blame all got there snouts in the trough

Profile photo of oliver s
Member

Er – the fact that the banks are providing huge amounts to repay – albeit slowly- shows that they haven’t actually benefited and the money is now being recycled into the economy . The sad fact is that many directors of the banks at the time have really benefitted e.g. Andy Hornby who was running HBOS walks away with all his bonusses , salary rights and now he is CEO of a bookmaker( Corals) . Says it all when he should be behind bars.