The first report regarding the PPI, as a poor product, was first published in 1998. In this report, payment protection insurance was defined as deprived creation because of its expenses and exclusions. From 1998-2005, various publishers started highlighting the different PPI problems people were facing at that time. After these reports, many PPI Claims were filed against the institutions but either some of them were rejected or not compensated due to a poor claiming procedure.
Significant Years of the PPI Outrage
In November 2005, FCA published the first report on PPI that identified the poor selling practices and lack of obedience control in the market regarding company visit and anonymous shopping practice.
In October 2006, FCA not only fined the small institutions for misselling PPI but also issued another report, having the evidence against the different 24 companies which enforced PPI policies on the people. An enforcement procedure was filed against these 24 institutions.
Some of the major financial institutions are listed below:
- Lloyds: This state-owned lender shocked the people and its rivals by setting aside £3.2 billion to cover misspelling PPI Claim.
- Barclays: It set aside the claim of £1 billion and agreed with financial service authority (FSA) to connect different customers and assess the situation.
- Royal Bank of Scotland: This bank had estimated a claim of £1 billion and more to give to the people for misselling PPI.
- HSBC: Being the Europe’s biggest bank, HSBC had set aside the $440 million to cover potential PPI accountability.
- Bank of America: It had raised a stipulation for misselling PPI to $650 million from original $594 million.
- Santander: This Spanish bank that bought Abbey, Bradford & Bingley and Alliance & Leister did not defy the findings of supervisors and paid compensations.
The data provided above might have varied with more research done by the FCA. Financial Conduct Authority (FCA) in the UK is responsible for handling the scandal caused by the PPI Claim made by people on the financial institutions of the country.
In the year 2007, major financial institutions were fined for PPI failings. In the year 2008, a PPI comparison table was introduced by FCA and Competition commission published two papers, highlighting more problems in PPI market. In May 2008, a report was published, stating that there were 2 million people who would never be able to make PPI Claim. In the same year, it was concluded that PPI was sold not only as an independent policy but also alongside loans and credit cards.
In the year 2009, Competition commission stated that PPI shouldn’t be sold with Loans and FCA asked the chief executives of the financial institutions to stop selling PPI with loans. FCA also banned the selling of single PPI premium in the same year.
In October 2010, Banks started to seek the judicial review over the new measures, arguing that they have obliged standards altogether. All the claims were left pending until the review gave a result.
In April 2011, Court ruled in the favour of FCA and FOS and gave 21 days to banks for appealing. In May 2011, banks withdrew the case from courts and decided not to go against the court’s decision.
In July 2012, PPI became the ‘most complained about’ product, giving rise to the biggest outrage in the financial history of UK.
Timetable of FCA
After these complaints and feedbacks in the year 2015, banks talked with FCA for creating a deadline for PPI Claim negotiation. In December 2016, court and FCA confirmed ‘June 2019’ as the claim deadline and also fixed the deadlines for consumer communication campaign and provision on ‘Plevin vs Paragon Personal Finance Ltd. Supreme court judgment’.
There isa number of PPI misselling reports that are still coming but after the steps taken by FCA and the Supreme Court in the UK, people are hoping that this big outrage will be concluded soon.
Author Box: Stephen Heyer takes you on a quick tour, covering the history of PPI news that climbed the ladder of controversy like never before. He also discusses how PPI claim led to the biggest scandal in the financial history of UK.