The aftermath of the mis-sold PPI scandal

Billions to be paid out to ripped-off customers

by Russell Shackleford, 8th September 2011

The mis-sold PPI scandal saw millions of consumers ripped off by yet another underhanded tactic from the banks, but is it truly over - or have the banks simply pulled the wool over our eyes?

With new regulations from the Financial Services Authority, lending institutions - mostly high street banks - have been placed under obligation not simply to refrain from PPI mis-selling in future, but also to apply the freshly introduced rules to past sales, meaning that borrowers who had costly and often-useless loan insurance policies forced onto them are entitled to receive a portion of the many billions of pounds these fiduciary fiends elected to abscond with.

Of course, the banks did not take the retroactive application of new regulations lightly, and so begun the process of a judicial review required to establish whether or not the FSA was in the right for requesting that the banks take responsibility for ripping off innocent customers. The answer came back that the banks were in the wrong, the new regulations should have been common sense anyway and that they were now in the position of being obligated to offer redress to those who had been mis-sold PPI.

PPI is a form of insurance which was, unfortunately, sold to people who did not need it, could not use it or even had not been told they were going to be paying extra on their loan for optional cover. The scandal arose from banks making billions off of people using sly tactics and sneaky wording when it came to offering loans. Some brokers even outright lied to their customers about PPI being a necessity if they wanted the loan, whereas in reality it is not permissible for the sale of PPI to affect a customer's chance of getting the loan at all.

But with the new regulations firmly in place, those who were mis-sold PPI are finally getting their own back.