As you’ve probably heard by now, the payment protection insurance scandal, otherwise known as the PPI Claims Scandal, has become the biggest financial scandal in UK history.
This scandal is expected to cost the banks approximately £35 billion. If you’re interested in learning more about how this unfolded, read on.
The first hint of trouble happened as long ago as 1998, when a Which? Magazine identified payment-protection insurance as a product with a poor value. However, seven years passed in which everything seemed to run fine, at least from the outside.
The next hint that something might have been amiss happened in September 2005, when the Citizens Advice Bureau published a booklet called “Protection Rackets.” This was a report that identified various problems in the PPI market.
Two months later, the FFA issued another report also noting the problems in this market. A year after that, the Office of Fair Trading issued yet another report.
In February of 2007, nine years after a magazine first identified PPI as a poor-value product, the OFT finally made a formal referral regarding the mis-selling of PPI.
A little bit more than a year later, Which? Magazine published a report noting that 2 million people might have been mis-sold PPI.
In January 2009, two years after the OFT made the formal referral, the Competition Commission made a recommendation. They stated that banks that sell loans ideally should not sell PPI at the same time.
A few months after that, the FSA banned the sale of single-premium PPI policies.
It wasn’t until September 2009 that the FSA issued a paper outlining how to handle PPI complaints, and it wasn’t until a year later that the British Banker’s Association responded by asking for a judicial review of the new guidelines, arguing that they imposed new rules retrospectively. At this point, the banks put PPI complaints on hold pending the outcome of that judicial review.
Six months later, the courts ruled in favor of the FSA. The Lloyds Banking Group became the first major bank to withdraw from the legal challenge. Barclays, HSBC, and RVS banks followed Lloyds’ lead.
By July of 2012, PPI became the most complained about product in the history of the UK banking. By February of 2013, Lloyds was fined £4.3 million for delaying PPI payouts. That might have seemed like a stiff fine, but it was nothing compared to what Lloyds experienced in June of 2015, when they were fined an additional £117 million for mis-handling PPI complaints.
In October of 2015, banks entered into talks with the FCA, in order to negotiate the PPI claims deadline. This decision is expected to be rendered in May of 2016, and the anticipated cut-off date for PPI complaints might be as early as May 2018. That’s why if you believe that you were mis-sold PPI, you must act now before the cut-off deadline.
If you need advice or you want us to handle your PPI claim on your behalf, please call us at 0800 840 7292.