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Scotland Wide PPI Specialists

How PPI Has Changed the Face of British Banking

12 March 2018

Whichever way to choose to view it, the mis-selling of PPI has changed the way we do business with the banks. Customers no longer feel safe in assuming that the bank has their best interest at heart. Loyalty and trust have been breached in the most unimaginable way possible.

But just how has the British banking industry been changed by the PPI mis-selling scandal?


The scale

Back in 2008, when the issue of mis-sold PPI was first raised, no one had a true sense of the scale of the problem. And so, when you realise that the collective compensation paid out is far is twice that of the London Summer Olympics budget of 2012, you get a better idea of the scale of the mis-selling issue.

The Financial Services Authority was re-packaged as the Financial Conduct Authority, a regulatory body that now has the powers to call into question how banks are behaving, forcing them to change if need be.

Unexpected and very welcome windfalls

No one realised the impact that claiming PPI compensation would have on their personal finances. Duped by banks for years, they paid for an insurance product that was useless.

However, it is a double-edged sword as the PPI compensation you receive should put you back where you would have been if you had not been paying PPI premiums. In effect, it is not quite a windfall but your own money that is due back to you. Add on to this the 8% 'compensation interest' however, and it is a welcome windfall nevertheless.


The Financial Ombudsman Service, for example, have taken on more staff to deal with the huge PPI compensation role it is now finding itself playing. Some banks, in order to meet the deadline for responding to PPI compensation claims are finding they are not only needing to take on extra staff but also to redeploy some staff from other areas.


The way PPI was mis-sold has raised several questions about the rate of commission staff are offered, as well as the profit margins in some products that banks sell. These two factors combined mean that the breeding ground for mis-selling was set. Incentives are all well and good but when they outstrip salaries, there can be problems, as PPI has shown.

The Plevin case recognises this and means that customers who paid more than 50% of the cost of PPI in commission and were not told, are also now entitled to claim this back.

Consumer power

The biggest lesson from the PPI debacle is the fact that consumers are now more aware of their rights when it comes to what financial products or service they 'should' be buying. And we have made our feelings quite clear: this bullying behaviour from the banks will not be tolerated.

But there is a deadline by which time PPI compensation claims must be made. Isn't it time you made yours?