A lot of other countries in Europe get along fine with their PPI system, but in the UK it seems that banks couldn't resist the opportunity to make big profits from duped customers. Basically it was found that banks were forcing PPI onto customers that took out loans, to an extent that in some instances customers were taking out insurance on unemployment when they were retired or otherwise out of work. The backlash meant that all unfairly sold PPIs had to be repaid to customers, and there were additional fines for individual acts of duplicity.
Initially it seemed that Alliance and Leister were to be the most subject to punishment. Their practice of encouraging employees to push PPI onto customers without making it clear to them what the rules were led to a lot of mis-sales. On top of compensation the FSA fined the bank seven million pounds for their crimes. Having said this, Santander, the owner of Alliance and Leister, have been the most amenable authority when dealing with claims, employing more staff to try to get the problem sorted faster, and not resisting the legality of repayment along with other banks.
The fault seems to have been with poorly trained staff who didn't know the rules of PPI selling, and were only interested in the commission they got for selling it.
Some banks have incurred further punishments for failing to comply with the need to repay customers long after the government ruling. Lloyds have dragged their heels on processing customer complaints, and along with the Bank of Scotland they opposed the ruling for as long as possible. For their pains, they've received fines amounting to around sixty million pounds, which should have set the record straight for them.
Unfortunately there is still a great deal of confusion about the process of claiming which has led to further issues with people getting rightful compensation. The repaying doesn't relate to all PPIs that were taken out, only those that were sold unfairly. A large volume of people trying to claim without any basis for doing is making it hard for banks to keep up with demand.
Initially it seemed that Alliance and Leister were to be the most subject to punishment. Their practice of encouraging employees to push PPI onto customers without making it clear to them what the rules were led to a lot of mis-sales. On top of compensation the FSA fined the bank seven million pounds for their crimes. Having said this, Santander, the owner of Alliance and Leister, have been the most amenable authority when dealing with claims, employing more staff to try to get the problem sorted faster, and not resisting the legality of repayment along with other banks.
The fault seems to have been with poorly trained staff who didn't know the rules of PPI selling, and were only interested in the commission they got for selling it.
Some banks have incurred further punishments for failing to comply with the need to repay customers long after the government ruling. Lloyds have dragged their heels on processing customer complaints, and along with the Bank of Scotland they opposed the ruling for as long as possible. For their pains, they've received fines amounting to around sixty million pounds, which should have set the record straight for them.
Unfortunately there is still a great deal of confusion about the process of claiming which has led to further issues with people getting rightful compensation. The repaying doesn't relate to all PPIs that were taken out, only those that were sold unfairly. A large volume of people trying to claim without any basis for doing is making it hard for banks to keep up with demand.
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