Banks left counting cost of PPI scandal
Coffers and reputations hit equally hard
by Allan Nogle, 26th September 2011
The reputation of the UK's banks and lenders has taken a severe hit due to the recent PPI mis-selling scandal.
Many thousands of UK citizens are now approaching financial institutions more circumspectly than previously after learning that they had fallen victim to an egregious industry-wide mis-selling of the product payment protection insurance, more commonly abbreviated to PPI.
The corruption does not lie within the constitution of PPI itself - it is a potentially very useful insurance policy conceived for the purpose of covering a borrower's repayments in the event of some great misfortune befalling them which leaves them with insufficient funds.
Not only has this scandal harmed the public image of the banks, it has also left them considerably worse off, due to the volume of compensation claims and the amount of money they have been made to hand back to those who were cheated out of their hard-earned cash.
This comes after a long and bitter legal battle between the banks and the Financial Services Authority (FSA) resulted in a ruling compelling the banks to refund anybody who could demonstrate that PPI had been wrongly sold to them.
Mis-selling of PPI is a beast which takes many incarnations - some people had it added to their loan completely unbeknownst to them, while others took it out on the understanding that it was compulsory, when in fact it was not. Many people who have experienced these or other forms of deceit have successfully won handsome sums in compensation after forming a claim.
What's more, thousands of people still remain unaware of the iniquitous deed which was committed on them, and as more and more of these people get wind of the duplicity perpetrated by their lenders, the volume of claims with which the banks are being assailed is unlikely to abate.
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