Independent financial advisor blasts banks over mis-sold PPI

PPI scandal brings shame upon financial services, expert says

by Luke Whitmore, 20th May 2011

An independent financial advisor (IFA) has hit out against the banks for their conduct in the PPI mis-selling scandal.

Speaking in the wake of the mis-sold PPI court ruling, which leaves banks legally obliged to offer redress to consumers who were systemically mis-sold unnecessary and expensive Payment Protection Insurance policies, Keith Richards, who is the group distribution and development director for the IFA association Tenet, has blasted lending institutions for what he sees as a betrayal of customers' trust which shames the financial sector.

"The negative perception of another mis-selling scandal will do no favours to the financial services industry in general," he commented. "IFAs, in particular, undertake more comprehensive reviews before advising clients on their specific needs so it is a shame that this most recent issue will be considered a mis-selling scandal, rather than evidence of poor process and systematic selling by a corporate entity, as opposed to individual adviser failings."

PPI was so widely mis-sold to customers that banks have already put aside over £5 billion to cover the compensation they expect to have to pay out. While the insurance can be useful when sold to people who are able to make use of it, many of those who suffered from mis-sold PPI ended up paying out expensive premiums for insurance which they could not use, did not want and in some cases were not even aware of having taken out.

"Sadly consumers are unlikely to distinguish a corporate process driving higher margins for each transaction, from actual advice," commented Richards. "PPI can of course be valuable and appropriate cover so it is a further travesty that consumers, even when sold correctly, may attempt to claim compensation because of the perceived mis-selling issue now associated with product."

Despite the new FSA rules which require the banks to compensate customers, some are already taking advantage of a loophole which allows them to reject any complaint which they previously dismissed.

If you've been mis-sold PPI, we could help you make a PPI reclaim today.

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