PPI and banks: Must pay, will pay?

So could their resort to the courts be described as vexatious which surely the shareholders should have something to say?

It is not compensation but returning money obtained by various forms of deception (euphemistically called 'mis-selling@ c.f. energy companies).

It shows the banks readily act together to defeat action on behalf of its customers.

Another argument that they need supervision not post hoc regulation and long court cases to remedy mal-practice.

Brazenly rotten to the core.

As someone who's self-employed and had my intelligence called into question time after time for NOT taking out PPI, hooray! At last the banks with their complete lack or morals or concern for their customers have been called to account even on such a (relatively) small part of their gross mismanagement over the last few years. Not that I expect the banks to do the decent thing and pay out the money they've swindled from customers straightaway. The only people they're interested in paying billions to is themselves.

Well the chickens ARE coming home to roost. Well done to the Courts for standing up for good business practice. All those who say it's all sewn up by a wealthy cabal of friends should enquire why the judges don't belong.

The sheer volume of mis-selling means that there is no question of the banks doing it by mistake. It was a cynical method of extracting profits from borrowers; no wonder borrowers were more valued than depositors.

You have ex insurance salesmen flogging policies to people desperate for money to get on the housing ladder or improving their lifestyle. Being bankers, not insurance salesmen, means they would have been trusted and little arm twisting was needed to persuade customers that the insurance is part of the deal. I can make a very persuasive argument for the insurance protection, but of course I would not mention that it would never pay up.

I suspect the banks will close ranks once more so it will be impossible prove liability attaching to any of the directors, but there is certainly a liability to borrowers which will have to be rectified.

This is quite different from the cause of the banking crisis. That was bad judgement, this is fraud.

I was fobbed off by LLoyd's with a 'goodwill' payment for being mis sold a PPI, Lady Grey who had a loan from the same person as I at the same branch, did not trust Lloyd's and filled in the FSA form, she was returned all the money she was conned out of. Moral ? women are more sensible than men and never trust the banks ! I was first mis sold then misled, good thing I am one of their premier account holders, God knows how they would have treated me otherwise !

"Second, it is a logical absurdity that the policies should have been sold by the banks to the self-employed, given that is impossible for a self-employed person to be made redundant."




Never mind 'logical absurdity', what other explanation can there be than these mis-sellers were confidence tricksters?

Surely a crime has been committed?

This wasn’t miss-selling, it was criminal fraud.

So charge those responsible and when found guilty, send them to prison as the conmen they are. Only then will banks realise that profit is not the overriding consideration and they have a duty to act in an honest and legal manner with their customers.

> The damage is greatest for the two banks in which we as taxpayers have big
> stakes, Lloyds and Royal Bank of Scotland

Isn't Royal Bank of Scotland the one that was run by that golf playing knight, Sir Greedie? Shouldn't we empty his pockets, before we allow any compo to flow from the taxpayer to patch the damage done by these greedy, short-sighted, underhand bankers who somehow got promoted way beyond their level of competence?

And shouldn't we also shake down the shareholders at the time of the great wrongdoing? It has nothing to do with me, a taxpayer, and everything to do with those who hold the other 15% of the shares. Let them pay this compo, if it must be paid, and let bankers chip in with special Robin Hood tax on their wages and transactions – they always claim they have plenty, so it's right to make them dig very deeply indeed into those pin-striped pockets of theirs.

"So what next? Well the banks could make those two and a half million victims of mis-selling wait another couple of years to be made whole by appealing to the Supreme Court."
Wouldn't come as a surprise if they did. Its all about the money and how much they can extract from their customers. Compensation will be welcomed by those who lost out, but what about putting those responsible in prison. We need proper punishment to stop this kind of activity. Also what about the bonuses? Given the fraud that has taken place, it is not unreasonable to expect these to be docked.

Ever get the feel our carcass is being picked clean by vultures.

@ 4. At 15:40pm 20th Apr 2011, pietr8 wrote:

> Well done to the Courts for standing up for good business practice.

It's now perfectly acceptable for middle-class judges to bash bankers with the rest of us. Well done, one and all. Now let's pin all of the bill on those pin-striped boneheads!

A Fraudulent Cartel charging consumers for non existent products to the tune of billions of pounds.
How many shops would you have to steal from to rack up that sort of value of theft? There are many shoplifters in jail - they need to be joined by, what Gideon and other buffoons refer to as, 'talent' whereas I refer to them for what they are - greedy and corrupt.

For my part I have a concern about how people will get their money back, if the banks are charged with reviewing the cases and deciding who gets the money back, they will sureley seek to minimise what they pay back and a lot of people will not get their money back, if its left to us to claim, most of us cant remember exactly what loan(s) we took PPI out on and when. The banks should be made to throw all their books on all their PPI policies open to someone independant who should see exactky who was sold a policy and how much they paid and decide who gets paid what. Also, does this apply to the non-bank organisations that sold these policies as well?

> Unless of course they regard their reputations as so impaired that there's
> nothing left to lose from prevarication.

The reputations of all our bankers are in tatters. They have a very long way to go in restoring them, including lay-offs, large pay cuts all round, lower profits from here on in, much greater competition, higher taxes, less transactions, harder work, more regulation and transparency, and much improved ethics.

It's their choice - adapt or retrain. I still need a decorator for my conservatory, BTW.

I am no bank lover , but to suggest you can sell a redundancy policy to the self employed is absurd. Self employed people are very savvy on the whole or they would not last 2 minutes in the real world.

The above suggests that the FSA is treating everyone as idiots incapable of the simplest of decisions. The reality is the mis selling is being exploited by "Recovery" agents and if some one offered you free money , you would take it and plead ignorance...

Great news! Proves the system can work, and it will be interesting to watch the people who want to tear the system down cheer for it for a while!

This comment was removed because the moderators found it broke the house rules. Explain.

oh and another thought, we need to make sure that they dont pay for this by increasing charges, because you knkow what, the poorest bank customers will end up paying those, in fact its time to get rid of bank charges and stop the banks and other financial organisations from charging anything other than straight interest (at regulated rates)

There was so much mal practice during the Blair Brown era this was just another part of the dishonest facade of that era . Redress of course comes way after the fact, as the banks apparently are almost above the law or so it seems to the average mortal. A good article, I do wish you had avoided the use of "gobsmacked" to make your point, it is such an ugly word and should be avoided by serious journalists, there are other more suitable words to express your point.

all the commissions paid out should be paid back with interest etc. Then perhaps the pigeon will squeal and start to show the paper trails to those whom "inisited" on this via target for earnings etc. Many of these were front load with commission to be paid to the sellers and the management triers that were putting presure on to make sales.

who insited that RBS and loyds merge ah yeah that man that should never be allowed near any top position again

The real criminality here is the outrageous levels of commission the Banks are paid for selling this type of insurance. If the commissions were controlled to reasonable levels then the incentive for Banks to oversell this form of cover would disappear and we might get back to sales being made on the basis of need. In addition the Banks are tied agents for this business - in other words they do not trawl the market for the best deal. PPI can be essential for some and a simple Google search will bring up a number of good deals from reputable companies.

An example - I was offered this cover from my building society for a mortgage at £44 monthly but I could get this for £12.40 per month by shopping around. It does not take a genius to work out that a significant part of the difference is the building society commission.

Did I buy it? No. This form of cover is almost impossible to get to the point of a successful claim because of the conditions in the policy so be warned.

bank customer: can I have a credit card.
bank staff (as aside) ha ha another mug, more commission for me if I sell them PPI, who cares if it is valid!

several years later.....
bank customer: can I have a refund on my missold PPI policy.
bank staff: ha ha not likely, wait two years, the case is going to appeal.

the whole banking system needs the sign "under new management"....
this is usually what happens to restaurants, businesses etc when they go bust due to dodgy decisions.
end commissions on financial products.

By the way folks, this goes further than the banks, has any had HP from finance houses via car dealerships, furniture stores etc. Massive scam going back far more than five years. Some people did not even know they had signed for it.

Robert, Let us hope that the energy companies are next. I heard a Russian gentleman on RT News yesterday say that wholesale gas prices had fallen to one quarter of what they were a year or two ago. If that is right can you or anybody else explain why it is that the energy bills in the UK keep rising apparently exponentially.

17. At 16:17pm 20th Apr 2011, MisterSpock wrote:
oh and another thought, we need to make sure that they dont pay for this by increasing charges, because you knkow what, the poorest bank customers will end up paying those, in fact its time to get rid of bank charges and stop the banks and other financial organisations from charging anything other than straight interest (at regulated rates)

......
I suspect this is inevitable, because we are the source of banks profits. I've said this before, banks are wealth extractors from the economy: our wealth.

hear hear David, there is all the violence, unrest etc associated with the increased student fees, but I remember trawling through the pathetic literature distributed to the 18 and under age group about the initial student debt arrangements (under Blair/Brown).
Not a single word about the interest rate charged and to be charged, the collection of said debt, liabilities in later life..... just the usual made up 'case studies' . And this from the government! so what hope for financial transparency from what were private institutions.
Government's main job is not to govern, but to educate, regulate and jurisdict.
Sadly the government is made up of MPs so forget about the above.

Another nail in the cofin to stamp out "Rip Off Britain". No matter which way you look at it, we are getting ripped off left, right and centre and it's about time it stopped. I would also say that most insurance as a whole isn't worth the paper it's written on, it's a joke. From food to cars and tv's to insurance and other financial services. We are being ripped off.

What the general public are probably unaware of is that the FSA who are supposed to regulate these type of things have known what has been going on for years and have done little or nothing about it. Why? Because the majority of the people in high office running it are ex bank or insurance company employees of one sort or another. Hector Sants their head honcho in particular. They are not going to dump on their mates.

The FSA which could be called a staging post for bank and or insurance company placemen even had the audacity to invent a proceedure called "Treating Customers Fairly" commonly referred to in the financial services market place as "TCF". It has a ridiculously long list of rules concerning how customers should be treated and it's creation seems to imply that everybody other than the banks has not been treating customers fairly, which is far from true. The banks have always been the worst offenders but little has ever been done about it.

Anyone waiting and hoping for a refund or compensation don't count on it just yet. The BBA have their lawyers working overtime on this trying to assess whether to appeal as they did over excessive bank charges. If I were a betting man I would bet on them appealing.

Our politicians will not tackle the banks properly because many of them or their parties are in the pay of banks and of those that are some are not bright enough to beat the bankers and the rest have not got the balls to tackle the banks. Despite all the talk and posturing about splitting the banks into wholesale and retail/ transactional nothing has been nor have salaries and bonuses been properly tackled.

I am by the way employed in the Independent Financial Services industry.

PPI is yet another symptomn of where the finance industry has gone badly wrong when it thought it was a retail business selling products to people and incentivising itself (through the profits taken immediately for risks well into the future) and its salespeople with commisions and bonuses.

Bonuses should be outlawed in finance industries - pay your staff decent living wages, if they are lazy fire them , if they perform well promote or increase their salaries, if their prior years performance is found based on false sales fire them (gross misconduct is it not) - but don't ever reward them based on sales values alone or nominal short term profit until it is actually realised.
Because as PPI , pensions , insurance, investment and mortgage misselling (in some indivdual cases to the point of fraud) scandals have demonstrated clearly - the link is giving bonuses and rewards.

'couldnt possibly sell to self-employed'. Really?
Well , I got made redundant on payday once, had some cash in a bsoc, went to bank for an overdraft ( as I'd had no notice and hadnt been paid, I was about to miss a mortgage payment, needed to extend overdraft before money cleared from one account to another, i didnt NEED to borrow anything).
That was refused by my bank, but instead they would lend me money, even though I specifically stated I had no definate income, just the promise of some self employed work for about 6months. However they would only lend me the money if I took the PPI out. I then looked at the PPI and said 'but this doesn't cover me if self employed'? They just repeated that I couldn't get the money unless I got the PPI and wouldn't extend overdraft... Hobsons choice really, but there ya go, thats why a self-employed person would have got useless insurance..
( will say, they wont do this anymore, they wouldnt lend me anything nowadays...)

Well we as major share holders of 2 of the aforementioned banks can prevent further massive payouts to the lawyers by stopping them appealing to the high courts and limiting the tax payers outlay..... as for the others that is up to their share holders.

But what ever happens i am certain the tax payer will end up providing the funds for the payouts, rather than the guilty parties, they have bonus's to protect,and are the elite of our country, and if we don't do what they require they will take their ball to a new home.

Presumably, the financial institutions WANTED customers to purchase PPI so that the mutual transaction of debt and credit would not turn bad. Instead of asking the customer about their ability to pay, and refusing credit if the customer did not satisfy certain criteria these institutions have yet more subprime debt in the pipeline?.
Self-employed people have benefited and continue to benefit from generous tax breaks and have probably already had the debt written off by business bankruptcy. Low paid employees who have been made redundant and people who have fallen sick should receive payouts NOW.

Many years ago as the new business director of a finance company I was visited by an American Banker who proposed we offered sickness unemployment and accident insurance to all our customers.It was "sold" by means of showing me a pie chart and being told the we,the company,could decide on our level of profit when we set the premiums.In other words it was a scheme designed to enhance profitability..full stop.I declined the offer on the basis that in this country the unemployed were entitled to benefits,etc.From that day the scheme grew and grew .If anyone has doubts about the reason for it being sold get the sellers to advise the profits they made!!.

Ron Basher

It is worth considering that the FSA spent almost all its time on going after the little guys, many thought at the time that this was more than just a little beneficial for the club of bankers, civil servants and regulators.

Now we have increasing evidence that the real scams were being committed by the big banks whilst the small financial services firms were being regulated out of existence by ever increasing rules and paperwork.

Almost all the small financial advisers have gone now leaving consumers with little choice but to get their information from the banks, and the banks have capitalised on this by giving poor advice and leveraging ever last penny from their customers.

Was this some sort of unintended consequence, somehow I doubt it.

Congratulations though must go to the small banks such as Co-op and Yorkshire who have been honest and straightforward throughout, I genuinely hope that they are the future of UK Retail banking and not the mammoths that we have now.

David, comment number 18, this has nothing to do with 'Blair and Brown' this scam, as with all the mal-practises you refer to goes back to the eighties and blame should be laid fairly and squarley at the feet of Mssrs Reagan and Thatcher, with their de regualtion and other policies designed to free financial institutions from rules.

I've lost count of how many times I've turned down PPI. I knew they'd never pay out (self employed) but it seems so many didn't.
Senior execs pressured lesser staff top push these worthless products by ensuring that they didn't get a liveable wage if they didn't. They then paid themselves millions in bonusses. These are the real criminals and they should be agressively prosecuted as the cheats and fraudsters they so obviously are. Then when convicted, we can use the proceeds of crime act to strip away their surrey mansions, porsches and fat pension funds. Lets get back to bankers earning their money by making it for their savers, rather than simply stealing it as seems to be the modern culture in the 'city'.

I worked for a fairly major bank around 7 years ago, selling personal loans. I had joined them from another company, where I had been selling insurance. Within the first few days of my training I'd told them they were mis selling PPI and refused to sell it on their behalf. I was told that I had no choice and should find another job if I felt that strongly about it. Needs must, and i done what was asked of me. A few years later they were fined and told in no uncertain terms that if they did not change their practices they would be banned from selling personal loans and that they were to stop promoting PPI immediately. I won't lie, I got a lot of enjoyment out of saying I told them so.

I stopped trusting and using banks years ago and as for insurance,surely there is no bigger con than this,in all aspects,especially with consumer insurance be it with banks or extended warranties.

So who will end up paying back the £4 billion that was defrauded from bank customers? Why those very same bank customers (us) via legal transaction charges and interest charges levied on our future business with them. I have been with an ethically moderated bank for many, many years and guess what, they didn't fall victim to the credit crunch because they weren't greedy enough to involve themselves in the round robin selling on of toxic debt and as far as I can make out are not involved in the current PPI morass either. The answer is simple - do not use those that abuse you.

20. At 16:27pm 20th Apr 2011, Insurancebloke wrote:
"The real criminality here is the outrageous levels of commission the Banks are paid for selling this type of insurance. If the commissions were controlled to reasonable levels then the incentive for Banks to oversell this form of cover would disappear...."

Oh dear. If Insurancebloke really is an insurance bloke I find myself agreeing with an insurance bloke - unheard of!

The one common factor with this debacle and the banking crisis is the payment of commission and bonuses depending on it. The more complicated the AAA rated investments which caused the crash the more commission was paid to the rating agencies, so the investment vehicles became so complicated even the banks couldn't understand them.

It was all commission driven, and it is still happening in the banks' investment (gambling) arms.

The banks main concern should be value for their shareholders.(That's thee and me for a lot of it.) Surely they can prevaricate no longer - if they do they will need to state very clearly how doing so increases shareholder value.

@ 15. At 16:15pm 20th Apr 2011, Abysmillard wrote:

> Proves the system can work, and it will be interesting to watch the people
> who want to tear the system down cheer for it for a while!

It's not right for some pin-striped slime-balls to pass off the bill for their vicious greed to the taxpayers. It's a sign that the old system is not working. We have to pin the bill on the atavistic odd-balls who caused this trouble in the first place; that's right - the bankers!

Now, if a fraudster is found guilty, he is imprisoned, not simply asked to repay the ill gotten gains. Let's see how many bank executives are jailed as a result of this ruling. Hopefully all of them.

I like the bit about "reinforcing competition is a priority". Today has brought the merger of another two building societies! Why can't the competition commission get serious?

Thousands of Public Sector Employees have been miss-sold PPI for their mortgages. Bank Loans and Credit Cards. Civil Servants and Local Government employment Terms & Conditions state that when an employee reaches the age of 50 they can no longer be made redundant. Instead they have to be offered a "RETIREMENT" package albeit a pretty poor one when compared to a Bank Employee. Of course the Banks refuse to pay out from the PPI when this happens as the insurance does not cover for early retirement. I remember well someone at my Bank trying to flog me a crap PPI policy - she was completely unaware of this clause in the PPI until I pointed it out to her - she never came back to me as I was 55 at the time...

Only last month did a lass at my Bank try to flog me a dodgy form of insurance linked to my Current Account. For just £12.50 a month I could have their super-duper gold plated ultimate current account. I would then be covered for travel insurace, car break down etc. etc... Not at any time did she ask, or care whether I needed or wanted this insurance. So they are still at it then....

Pay up? Nah, not until the very last court appearance, whenever that will be, several bonuses down the line I would imagine. I see an 'Equitable Life' style scenario developing. If anybody is expecting a banking moral code to arise from the ashes of outrageous fortune hunting they have inflicted upon us then they are sadly mistaken.

Robert,

Three of the seven pound coins in the picture accompanying your piece are fakes.

And only yesterday the shareholders in RBS agreed to pay the boss how much? The blame for this sort of crass immorality goes well beyond the banks themselves. The big shareholders in particular have a lot to answer for.

4. At 15:40pm 20th Apr 2011, pietr8 wrote:
Well the chickens ARE coming home to roost. Well done to the Courts for standing up for good business practice. All those who say it's all sewn up by a wealthy cabal of friends should enquire why the judges don't belong.

-----------------------------------------
Who says the don't belong ?

Lets not forget we have all been here before in 2009 with the unfair bank charges.

https://news.bbc.co.uk/1/hi/business/8425766.stm

In that case both the High Court and Appeal Court ruled against the banks but they got it overturned by the Supreme court.

We are just at the High Court stage in the PPI case, you can guarantee the banks will appeal and if they lose the appeal will take it to the Supreme Court again.

If they lose at that stage then and only then can you come out with your statement arguing against the plutocracy we are in.

The question I have is how far back in time are the claims going to go ... really there should not be any pre-existing cut off date?

I had a claim in the 90's ... and was de-frauded by a major player on a technicality and my complaint went to the previous daft Ombudsman scheme and was reviewed /adjudicated by an MP ... and what a waste of time that was!

It is good to hear that the courts are coming down on the side of the customer's rights. However, it is likely that government will stop short of demanding criminal trials for those responsible, or even meting out tougher rules on it, because of their own vested interests in the banking industry - so they don't want to rock the boat.

I would have to say, we need someone in Parliament today to act as a modern version of people like William Wilberforce - who stood up for the people who needed it.

@40. At 17:46pm 20th Apr 2011, Jacques Cartier wrote:It's not right for some pin-striped slime-balls to pass off the bill for their vicious greed to the taxpayers. It's a sign that the old system is not working. We have to pin the bill on the atavistic odd-balls who caused this trouble in the first place; that's right - the bankers!

So much invective so little insight! Most of our money is invested in the banks in the form of shares! My Lord don't you get it at all? This is a long term investment during which time the banks have to survive just so that we can get our money back.
Meanwhile they can pay the money back that they have taken by deceit, start making a profit their shares will rise and maybe even start paying a dividend and our nation will benefit.
Perhaps that is what you mean but what do these utterly useless proclamations of hate achieve?
Nothing!
Doh and double doh! Even my yucca plant can see that!.

45. At 18:58pm 20th Apr 2011, RW49 wrote:
Pay up? Nah, not until the very last court appearance, whenever that will be, several bonuses down the line I would imagine. I see an 'Equitable Life' style scenario developing.

I hope not! They are the two biggest retail banks....that would indicate that they are most vulnerable to us their customers. So if they are so brazen (and they may be) lets' take our money out! This is a fight that ordinary people can actually win...wouldn't that be cool? Or we could all just moan instead!

@ Etienne
That wasn't PPI, that was an upgraded account with benefits such as travel / mobile phone insurance etc as part of the package. It wouldn't cover any kind of repayments in the event you weren't able to. They were trying to sell you a product, in a retail bank..
Shock, horror, send them all to prison! /sarcasm

The reality is with the PPI situation, no matter how hard the sell it was always optional and whether or not PPI was taken with a product it would never have formed part of the material decision to lend. If a person is incapable of saying "No, thank you." when being offered a product then should they really have been in the market for a financial product? Perhaps if people did their own research before making a decision to use financial products then there wouldn't be the PPI gravy train that existed, ignorance is no excuse - except where the public is concerned.

If anyone feels so sorry for the Banks, especially those who rule them from lofty positions, and find they just cannot eat breakfast tomorrow morning, then fear not for it is ordained that after a few years on the naughty step these high ranking bankers will soon be kneeling in front of William and Kate's grandma to receive the accolades given by a grateful government for "services to something which we made up so as to reward our chums and keep them at the top and therefore keep the rest of us at the bottom."

my aunt, she is very sick

Mister Spock comment 34 .
I disagree taking this argument this far back is absurd . There was a single act that Brown performed as chancellor at the beginning of Blairs term in office; which was to
allow the Bof E to permit the relaxation of the lending/reserve ratio for high street banks .I believe the BofE began to raise doubts, which led to the creation of the tri partite system , effectively weakening the Bof E s powers to intervene, in what we now know to have been one of the worst periods of financial governance this country has witnesssed. The beginning of the so called boom or the biggest heist in history. Whose signatures were on the documents, a smoking gun Im afraid.

I have never taken out ppi, nor extended guarantees and am in fact suspicious of all but the most necessary of insurance - car, travel and home insurance and life insurance on large debt -ie mortgage. Much better to self insure. You just save what you would have paid in premiums so you have a reserve fund. Insurance companies use every possible way to wriggle out of paying claims and then increase the premiums each year. Banks and insurance companies are the biggest crooks out and I used to work for a bank.

I daresay the banks will find a way to stall paying out on these and of course their bonuses will still be paid next year.

I am a long serving employee of a major UK bank . Trust me when I say I concur wholeheartedly with those who feel deeply aggrieved at the situations that occurred in 2007 / 2008 : they have had dramatic effects on my own working environment , situation , and the economy and country at large , I will not argue against anyone who rails against the major financial institutions and their part in the Great Crash of 2008.
However ,
regarding the issues around PPI : speaking purely from personal experience I can attest to the very stringent regulations that I had to adhere to when discussing PPI policies on personal loans and credit cards . Yes, or course we wanted to sell the PPI - we are not / never were a charity , we are and were there to make profit !
I was expected to ensure the customer was at least eligible to consider the PPI ie in paid employment, paying NI contributions, under 65 yrs of age etc if they did not fit into these catagories then I could not and would not discuss or sell it .
When discussing it with eligible customers - and yes this COULD include self-employed people - I was expected to illustrate very clearly what the cover could offer , what it could not offer , the cost , certain standard exclusions.......and that the cover was optional . Fair to say that repaying any personal loan, credit card debt on time and in full is not optional ! So if the customer does not have any other "safety nets" in place lest they are made redundant , cannot work through illness or injury etc then it should be appropriate that PPI is discussed in depth with them .
Selling it to someone who is unaware they are buying it , or could NEVER IN ANY CIRCUMSTANCE claim on it ( eg unemployed, over 65 yrs , not paying NI contributions etc ) is clearly unacceptable .
That does not mean however that is never acceptable to sell or buy this cover .
There will be people out there who have been very grateful / are very grateful that they took out this kind of policy - strange how we never , ever hear their voices in this argument ??
I hope people will not assume that simply because they have never made a claim on a PPI policy , or were subject to an exclusion that they will seek some kind of compensation for mis-selling . Does one ask for compensation on home insurance / car insurance simply because they have never made a claim or had one declined for a specific exclusion ?
Once again - my bank offered%2

The possibility that banks might appeal and win is very real but since it is clear that many many people were mis-sold these products then we as customers could make them accept their responsibilities and learn a valuable lesson. The lesson being that good ethics are good business.

What scares banks most is a run! Although this may seem to contradict earlier blogs let me tell you that they would almost literally mess the carpet if enough customers simply showed intent to move their account or even slowly remove their money. I do not believe that there is any way that they would dare appeal if enough people could demonstrate that they would remove their deposits. You would not need to change your day to day current accounts just begin to run down deposit accounts and do it in an orderly way organised through a website???

I would guess that they would begin to think very hard before they appealed this decision if we the customers even began to make this possibility a serious topic. However if we do nothing and simply whine on uselessly who could really be surprised if we are treated in any way they please?

A clear message needs to be sent to the mega corporate world that consumers have power to ensure enforce ethical behaviour.

Simpleburger. You are of course right if your bank sold the product correctly and honestly then they have nothing to fear and naturally will not need to appeal todays decision.

The big problem with banks is that they quite literally don't have any money! So when 3 to 4 billion is needed to reimburse PPI miss-selling claims it will come from the very same customers! The reason for this is that the regulators have permitted banks to run their business on tiny levels of shareholder equity and at absurdly high multiples of assets to loans. To get from where we are today with essentially bust banks running on a knife-edge to banks run with far lower multiples of assets to loans requires either a massive increase in assets or a dramatic reduction in loans. There is quite literally no money to increase the level of banks assets (inc. equity) so the inevitable result can only be a dramatic reduction in loans - loan deflation on a massive scale is inevitable, unless someone knows how to square the circle!

There is however an arithmetic inevitability they the loans will be deflated and this can only result in a Long Depression lasting twenty or so years - what is more the longer we put it off the worse it will be and the longer it will be. In terms of a 1930s parallel the bankers are still giving more and more money to the gamblers on the stock market to meet their margin calls - but the stock is still worthless. Today the assets are property which if not entirely worthless is grossly overvalued. This PPI miss-selling is yet another ill wind which can only accelerate the inevitable (and entirely predictable) banking crash.

(This is why the Bank of England a.k.a. The Fools of Threadneedle Street are so incapable of action - they are scared rigid - they are terrified!)

According to the Collins English Dictionary 10th Edition fraud can be defined as: "deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage"

Evening Robert,
ah PPI and banks must refund customers who ALLEGE that they were mis-sold this insurance. It strikes me that some claimants will have a good case but some will be using the tawdry companies who advertise on TV for a no-win-no-fee basis.
The advert starts, "have you EVER taken out a loan..etc".
The same situation occurred with mis-selling of endowment policies and the claim culture is worrysome in that the sheer volume of claims means that not many will be investigated properly to see if there was indeed some malfeasance.
As JFH points out above, the banks do not have this kind of money to pay claims (and the staff necessary to process these claims) and once again, taxpayers money in these banks will be put at risk.
What happens when a bank is declared insolvent? Would claims still be paid?
The whole finance industry (including insurance salesmen) have a very poor reputation in dealing honestly with their customers and putting errors right. They just want the money (and the commission) up front and let someone else take care of the problems down the line and that is the culture that we must change.
The responsible person is of course the Director of the firm involved who insisted that employed staff must push these products for their own fiscal gain.
Let's have the FSA identify the direcors responsible and let's have some prosecutions here, not just payout twice.

Ah the final showing of a little bit of teeth.

Good result for "right"... now let the floodgates open.

This was fraud on a grand scale and well done to the FSA and to the Courts who upheld the FSA's decisions.

And the banks have plenty of money to repay customers. Firstly they have used the excessively low bank rates to widen their margins and repair their balance sheets and secondly they have continued to pay large bonuses to staff. They can therefore easily afford to repay customers simply by not paying bonuses over the next year or so, and I suggest that the Govt makes VERY sure that is where the funding for repayment comes from and NOT from their customers.

In 39. Pietr8 wrote,
" The more complicated the AAA rated investments which caused the crash the more commission was paid to the rating agencies, so the investment vehicles became so complicated even the banks couldn't understand them. "

Understand these (ha ha), 'investment vehicles' they certainly did. Why on Earth did the banks stop lending to each other, hence the crash? Because they knew what junk was in these 'investment vehicles'.

Also in 61 John_from_Hendon wrote,
"The big problem with banks is that they quite literally don't have any money! So when 3 to 4 billion is needed to reimburse PPI miss-selling claims it will come from the very same customers! The reason for this is that the regulators have permitted banks to run their business on tiny levels of shareholder equity and at absurdly high multiples of assets to loans. To get from where we are today with essentially bust banks running on a knife-edge to banks run with far lower multiples of assets to loans requires either a massive increase in assets or a dramatic reduction in loans. There is quite literally no money to increase the level of banks assets (inc. equity) so the inevitable result can only be a dramatic reduction in loans - loan deflation on a massive scale is inevitable, unless someone knows how to square the circle!"

How naiive,
All but around 3% of the money in our economy is CREATED by the privately owned banks (not by our government as so many might falsely believe) OUT OF NOTHING. If there is a reduction in the supply of money it's because the banks want it that way.
Ask yourself where the UK government got the billions needed to bail out the banks. Did they borrow it? from the banks? Are we paying interest on the money they created out of nothing (it only 'exists' as such in a computer) in order to save them from themselves? The mind boggles! (At the naiivity of a people who allowed private banks to wrest control of the money supply from them or their government). Mind you at least two US presidents were shot because the tried to get it back, they'll stop at nothing to keep the status quo which has them rich and us poor, despite us creating the realwealth in our economy.
Happy Easter.

Hang on a minute. What about the responsibility of those who bought PPI? If I'm self employed and I buy redundancy insurance am I either financially incompetent, or expecting to defraud the bank if business gets bad?

I looked at PPI for myself, and decided it was expensive, and seemed to have too many loopholes in favour of the bank. Now it seems that those who never read the small print are to be protected from their own foolishness.

I say, send those who bought PPI on mandatory financial training. They could start with 'Read all the contract before you sign it'

67

I agree whats happened to individual responsibility !!

Everyone I have known for years these products were expensive crap...

51. At 19:44pm 20th Apr 2011, Abysmillard wrote:

> Most of our money is invested in the banks in the form of shares! My Lord don't
> you get it at all? This is a long term investment during which time the banks have
> to survive just so that we can get our money back.

I didn't ask for one penny of that investment, thank you very much. It was forced on me by "Sir Greedie" of RBS. That’s why bankers, not banks, have to pay up first, before the rest of us. Please read that until you understand it. That’s called “moral hazard”, my man. Once they’ve felt the full pain of their actions, there’ll be no more iterations, I can assure you of that.

> Meanwhile they can pay the money back that they have taken by deceit,

Bankers will need their jobs alright, once we’ve emptied their personal coffers.

> proclamations of hate

Remember: bankers can only repsond to fear and greed, so we much always keep things very simple for them. Anyway, relax, we're only talking about bankers, here. Did you forget what they are doing to the world? They are still at it, BTW. Look at Ireland. Nope - there's just cause to despise the pin-striped posers. It sends the correct message to them - "quit being stupid, or else".

This is a welcome decision, but I only wish there was some consistency in court rulings against banks. Anyone remember the bank charges court case farce? As a direct result of that poor decision consumers are now faced with ludicrous increased charges, once again with a great degree of irony that the consumer is paying for banks' incompetence by the back door.

Re comment #2 - Hear Hear!

The power of the banks and financial institutions in this country - and around the world - needs to be seriously reigned in. Their bleating about how hard done by they are makes me sick to the core. But reigning in their power would require our Government to grow a big set of kahunas - no chance of that. Much easier targets....like the normal working person for example.....

When I got my Free Bank Shares I kept them in a safe place until I needed some new Curtains and Drapes and sold them over the counter for a reasonable and fair price. Now my house is on fire and I am watching everything go up in smoke and I am not insured up to the hilt. The Fire Brigade would have attend sooner and might have saved my collection on Vinyl and Compact Disk including Compact Cassettes but they are on strike along with all of the other Emergency and Non Emergency Services who are waiting for their financial return in their off shore investments in Icelandic Banking. Somehow I don't think that my pokey little bon fire is big enough to thaw out those frozen assets for the strikers. So I am going to buy a few more cans of Beer and a Carton of Cigarettes and watch the neighbourhood burn down.

Public image is certainly not an issue, partly because as you say, their image is already in tatters - so what the heck. Too big to fail = too big to care.
But also, as there is no competition within the industry, then also there is no need to outshine the others on image or on any other issue.

The only competition in the industry is the competition for shareholders. It has nothing to do with Banking. It has only to do with getting loadsamoney and hanging onto it.

You still have to ask yourselves, will the banks go to the Supreme Court?

And even if they admit defeat or go to the SC and get defeated how are they going to repay people (and will they still mess people around?)

... And why do I keep getting a mental picture of Martin Lewis doing a celebratory jig a little bit too soon?

These bankers really are thieves and rogues. WHY ARE NONE OF THEM IN PRISON!

Re Robert’s final para. Let us not let banks off the hook again by looking the wrong way. Any prevarication by the banks should be at the banks’ expense. The settlement of arrears claims must carry an interest penalty, ie. interest to be payable on all amounts which become settled, applicable to the period from the date when they should and could have become settled to the date they actually become settled – the interest rate set at a lending level, not a deposit level.

If banks realise that failing to settle claims expeditiously will cost them more than settling quickly, the more likely they are to cut their losses and pay up!

If this is not already part of the FSA's remit, it should be effected asap.

Disgusting decision but hopefully the appeal will get it overturned. We need strong banks for a strong economy.

Or else what Jacques? Will you get them. What tickle 'em to death with your feather brained logic?

@ 76. At 09:12am 21st Apr 2011, Lindsay_from_Hendon wrote:

> We need strong banks for a strong economy.

We can't have strong banks when the City appoints dunderheads to run them.

@ 74. At 08:44am 21st Apr 2011, Steve Rich wrote:

> These bankers really are thieves and rogues.

True, but Abysmillard will compare you to Joseph Goebbels for that!

> WHY ARE NONE OF THEM IN PRISON!

Because we have been way too soft on the pin-striped plonkers. They have been a public nuisance for many years, and now we can't afford our health system because of their idiotic greed.

It's time to ban them from handling money. If they need work, I need a new stable building out the back. I'd pay them in manure, which is better than they deserve.

@74. At 08:44am 21st Apr 2011, Steve Rich

Steve incompetence and greed are not illegal. Unless you can find proof that bankers deliberately set out to defraud for the purpose of financial gain there is no proof of criminal act. Even if you could who would be prosecuted? I doubt you would see Fred the Shred Goodwin in court just a few minions thrown to the wolves the sate the public appetite for vengeance.

@76 Strong ethical banks would be nice though.

@68 I can't agree with those who say that this is a case were the people who were mis-sold these products have only themselves to blame and need to be educated about finance. You wouldn't say that to someone who has been mugged and send them on a self defence course.

We do not know if the banks will appeal, but there was no response to the suggestion about what we could do to make the banks listen to its' customers. Does one conclude that we only want to complain about it like we do the weather? Is it impossible for we the people to make a strong point without smashing windows and making matters worse?

@ 77. At 09:25am 21st Apr 2011, Abysmillard wrote:

> Or else what Jacques?

You didn't bother to read the article, did you? Even our judges are treating the bankers like dirt now. The FSA is forcing our greedy, socially useless bankers into line. The tab for Barclays and HSBC will be "pretty steep", and the reputations of bankers is "so impaired that there's nothing left to lose" - And Abysmillard asks "or else what" – what planet is he one?

48. At 19:12pm 20th Apr 2011, stennylfc wrote:
""All those who say it's all sewn up by a wealthy cabal of friends should enquire why the judges don't belong.""

"Who says the don't belong ?
Lets not forget we have all been here before in 2009 with the unfair bank charges.
In that case both the High Court and Appeal Court ruled against the banks but they got it overturned by the Supreme court."

Yes stennylfc I was wrong. The top judges probably do belong - they have tremendous power and are few in number. I should have checked judges salaries; they are paid a lot less than I thought in the lower courts. And don't forget that after the Appeal Court there's always Europe.

I think a lot of people have read a bit and believe they know everything. Typical in the new cutlure of i'm online so I know it all culture we are developing.

For a start anyone who has had a claim and had it paid out should not be due any refund. I assume they are happy customers and are not moaning here.

Customers pleadiing ignorance is not on either. The vast majority of claims are from chasing companies who use clauses within the CCA which expect a response within 'x' days. If not then the finance companies are in breach of the CCA and the company can claim all the moey back etc even where the customer has clearly been paying for something and fallen in to arrears. Dealing with the CCA on a daily basis I can say there are a lot of rules that are very heavily in favour of the customers, some are absurd.

I myself have PPP on my mortgage, probably not the cheapest but i'm happy that if I lose my job then I am covered for a decent period. I knew exactly what I was doing when I signed.

There were also changes a couple of years ago that make the selling off PPI very safe. It must be auditable, sold on the correct basis, calls recorded, documentation sent, cancellation periods ertc. Working for a company that does sell PPI I can safely say that everything sold within the last 3 years will stand up in any court.

Whilst some have suffered an injustice I suggest people check all the facts first.

Why are we using this new lingo, "mis-sold"? Who invented this term anyway?

What's wrong with the traditional terminology, "lied", "deceived", "cheated"?

Where are the bankers and call-centre staff who got their bonuses from negotiating & "meeting" performance targets selling these things? Surely they should be personally on the hook for this too?

Good day all

I do not comment often, however I am still at a loss as to why the Serious Fraud Squad have not been into the City of London and got the required evidence to commence criminal proceedings on the bankers and other financial (Crooks).
One has to ask why. Well going on the NOTW phone tapping affair. Even our law officers cannot appear to be able to challenge the high and mighty in our society.

Why have not the executives of RBS et al. not been investigated?

As they say I rest my case

A Ruffian from Macduff

This comment was removed because the moderators found it broke the house rules. Explain.

66. At 00:51am 21st Apr 2011, I_give_up wrote:
"In 39. Pietr8 wrote,
" The more complicated the AAA rated investments which caused the crash the more commission was paid to the rating agencies, so the investment vehicles became so complicated even the banks couldn't understand them. "

"Understand these (ha ha), 'investment vehicles' they certainly did. Why on Earth did the banks stop lending to each other, hence the crash? Because they knew what junk was in these 'investment vehicles'."

No, they only thought they knew the risks. When it became clear that they did not know the extent of default they stopped dealing, which was the proper thing to do. Unfortunately that action had consequences as those banks were too big to fail. Compare that to Barings where they stopped when they realised they did not know the amount of the indebtedness that Nick Leeson had got them in to.

In both cases though it shows criminal incompetence by those at the top, that cabal referred to in my previous post.

At least they lost their jobs in Barings - just look at how the present lot have suffered. Of course they need to keep their jobs to defend the banks in the Courts.

For a man who can afford stables and a decorator for his conservatory you seem very cross! Instead of constantly suggesting that bankers do these jobs for you I would suggest skilled tradesmen.
You seem to be barking..................up the wrong tree ;-)

#66. I_give_up wrote:

"jfh wrote "The big problem with banks is that they quite literally don't have any money....

IGU: How naiive,
All but around 3% of the money in our economy is CREATED by the privately owned banks (not by our government as so many might falsely believe) OUT OF NOTHING. If there is a reduction in the supply of money it's because the banks want it that way.
"

Yes, my idiotic mentally challenged fiend - BUT THIS UNLIMITED CREATION OF MONEY HAS DESTROYED THE WHOLE IDEA OF MONEY - and yes I am shouting!

We cannot afford to let this carry on - as hyperinflation is the only result and the inevitable result when too much money chases too few goods (as is the case of today's house and property prices.)

The banks have blown it (whilst they were under the 'supervision' of the FSA/Bank of Fools). The net result is that the price of money is ludicrously low - so ludicrously low that Depression is and can be the only result.

It is not the banks that 'want' the gravy train to hit the buffers it is the inevitable result of the excess creation of money that causes this to happen. This is the grand failure of economics.

Your view that we can carry on as we are is simply not supported by any historic parallels. At no time in recorded history has money been so worthless (as far back as there are records). The price on money has only one way to go and that is upwards. Unless it does you pension fund is worthless, all saving is pointless and overpriced assets become increasingly unsaleable with the limit being the necessary liquidation on the death of the owner. Indeed as this is the only mechanism for correction this is also why the Depression we are now just starting will last twenty to thirty years - UNLESS positive action is taken.

Abysmillard is right about one thing folks, we need to take action ourselves. For too long we have hidden under the shelter of our government and let them make the decisions for us. It's up to us to make the difference now and vote with your feet.

Take away their plaything and watch them cry, if they do not have our money then they cannot lose it. Looks like I may be going back to Co-Op after all.

As taxpayers, we'll all end up picking up the bill from Lloyds and RBS because some people are too lazy to read the small print. If you were self-employed and took out such a product, frankly you're best off in a minimum wage job where you can limit the financial damage that you could cause yourself and your family. Welcome to the nanny state where people who are too lazy to even try and understand what they are supposed to be buying are now complaining - essentially about their inept and indolent approach to life. Boo-hoo. I have always declined such offers as it was patently clear they are a waste of money. Funnily enough, I actually took the time to read what was supposedly being provided before coming to my [informed] decision.

83. At 10:07am 21st Apr 2011, boredofsillypeople

The commissions paid out on these schemes were very large. The regulations put in place seemed pretty toothless to many resellers. Many of these products were being sold through retail outlets by sales staff who were unqualified and paid high commissions.

There may be a case that the no win no fee brigade can jump on the bandwagon but if there is proof that they were paying for a policy for which they were ineligible why not?

Again the big story has been pushed aside for short change as Robert forgets to write about the US credit rating and current debt scenario(you know, the trillion dollar one with the ramifications for oil prices and foreign exchange reserves) and instead goes on yet another bank bashing spree. This week's statement from S&P is further proof that you cannot simply throw money to get out of a recession, maybe Robert could blog about that and the growing Japanese debt instead of taking potshots at banks which do nothing but harm the overall recovery.

Please let's stop using the term "miss-selling", because that makes the PPI fiasco sound like nothing more than a mistake made in good faith.

The reality seems to be that this was dishonest, with policies being sold to people (such as the unemployed) who could never conceivably claim.

Even worse, some mortgage offers were made conditional on taking out PPI, which was not just dishonest but coercive.

There seems to be a least a prima facie case for criminal investigation here.

I am sick of all this.

When boatloads of money is paid to one group of people, regardless of who hands the money over, ultimately it comes from the rest of us in one form or another - increased charges or reduced income. The banks may have to pay this money in the first instance but ultimately it will come from us - so why do we all seem to take such satisfaction from this decision?

I once (1992) took out a bank loan. I was told I would not get the loan unless I took out PPI at a cost which (from memory) took the effective APR up to something like 40%. I argued that I did not need it and got the loan without the PPI. So why are we having to pay for some people’s inability to do what other people could do?

In the80’s, personal pensions were introduced. I did not jump out of my employer’s final salary pension scheme for a PP but others did. Subsequently we’ve all had to pay for their wrong decisions.

I know there have been many cases of bad mis-selling so the current thinking is that victims should be compensated. I would ask whether this is right. Should we not rely more on people taking responsibility for their own decisions without every one else in society having to provide them with an expensive safety net whenever anything goes wrong?

91. Spot on

Caveat emptor is a sadly lacking principle in today's over regulated society. If you have signed the contract and the product turns out not to be suitable for you the ONLY person to blame is YOURSELF. This might come as a surprise but the job of the banks is to make money for their shareholders not nanny people on how best to manage their finances - that should be the job of schools and parents - they are NOT a public service. Everybody who uses banks will be paying for this through higher charges.

@ 88. At 10:37am 21st Apr 2011, Abysmillard wrote:

> Instead of constantly suggesting that bankers do these jobs for you.

I'll think you'll find that all informed people are angry with the destructive antics of our bankers. The few obsequious flatterers who show up here from time to time should try to get with the program, instead of praising the abject failures who have undermined the economy of Britain.

The current crop bankers are plainly not cut out for banking, judging by their results over the last several years. When they haven't been fiddling and gouging their customers, they've been driving their own shareholders into bankruptcy! It you can't see that for yourself, then there is nothing more I can do to help you.

Might bankers be more suited to manual labour? Who knows, but banking is obviously not the right thing for them.

This was ordinary High Street banking staff "selling" these things! (Something which has been deemed illegal.) Yes, the cashiers etc get bullied by their tinpot little managers, but they could have stood their ground and refused to sell on the grounds that the bank's behaviour was immoral.

In fact the whole SALES CULTURE in High Street banking is immoral. There's been one selling scandal after another. The Banks are NOT going to learn, when such behaviour generates £billions in profits for them, that they need to stop doing it. So we need to call time on this and ban them from doing it! (Otherwise the world's banking cartels will just carry on with their mafia like activities - they'll get rich, and you'll just suffer with endless years of more extortion.)

95. At 11:46am 21st Apr 2011, Shoppinghowler wrote:

> Should we not rely more on people taking responsibility for their own decisions
> without every one else in society having to provide them with an expensive
> safety net

Yes. In particular bankers must be treated very harshly indeed when things go wrong with their banks. At present, they just pass the cost on to you and me, like that Sir Greedie geezer, at RBS.

That's all over now. We still have to punish the perps at the time, and get the laws lined up so we can really go after the beggars if they try it on again. Let's hit bankers where it hurts them the most - in their pockets!

95. At 11:46am 21st Apr 2011, Shoppinghowler wrote:

96. At 11:55am 21st Apr 2011, Chris wrote:

--------------------------------------------------------------------------------

Two very good comments and i would indeed agree that there is not enough of the blame being put onto those who actually bought the policies even though they were unsuitable....of course you will get those who say "but they didnt understand fully what they were", well then WHY DID THEY BUY IT.....i always chuckle at the idea of someone who is self employed (and should therefore understand about finance) going and buying one of these pointless plans and tbh if they are willing to put their signature onto the piece of paper then thats theyre problem. If i go into HMV and buy a blu ray because the assistant there said that it was the best film ever. should i then sue HMV because i was unable to play the film due to my lack of a blu ray player??