PPI Compensation: Can Banks Clean up Their Image?
As Barclays sets aside a further £900 million in provisions for PPI mis-selling, the banks must work hard to build back consumer trust.
The banks have now refunded billions to compensate for heavy PPI mis-selling, which to date, has become one of the largest financial mis-selling scandals in UK history. Clearer regulations, improved staff training and larger fines by the FCA are all suggestions that have been raised to improve the banking industry’s situation and reduce the threat of a similar occurrence happening again.
Chief Executive at Barclays, Anthony Jenkins recently said:
‘We are committed to simplify, focus and rebalance the group to deliver higher and more sustainable returns across the cycle, while structurally reducing our cost base and strengthening our capital position’.
It is evident that banks are making changes to keep their heads above water and work towards healing the wounds from years of unscrupulous mis-selling. The banks have also had the added headache of compensating SMEs for Interest rate hedging products that were completely unsuitable leaving thousands of small business owners in a desperate financial situation.
Payment Protection Insurance was designed to cover the customer should they be unable to keep up with repayments in the event of an accident, sickness or unemployment. In many situations it was aggressively sold on top of lending products such as loans or credit cards. The mis-selling occurred when it was added without the customers knowledge, the customer didn’t meet the criteria to qualify for PPI or it wasn’t suitable.
Marc Davison, Head of Financial Mis-selling at TLW Solicitors said:
‘The fact the banks are providing extra provisions to deal with PPI claims highlights the very need for banking regulations to be addressed and review consumer protection. I’d advise anyone who has had a loan or credit agreement prior to April 2009 to think about reclaiming. Many clients come to us because there not sure how to proceed with a claim or have already been rejected by the banks, we can still help and have recovered thousands of pounds back in compensation for mis-sold clients’.
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