Archive for: December 2013

UK Banking Industry Losing More to Mis Sold PPI, Other Scandals

Lloyds recently announced that it will be providing an additional £750 million to its total PPI bill after announcing its third quarter financial results. Along with Lloyds, HSBC and RBS are also adding millions more to their respective PPI bills. So far, Lloyds has lost a total of £8 billion, almost accounting for half of the current total of £17 billion today.

According to experts, the UK banking industry could possibly lose more than £20 billion to mis sold PPI in the second to third quarter of 2013. They said that the number of PPI complaints is not falling in number. An evidence of such is the Financial Ombudsman receiving its one-millionth complaint in the third quarter of this year.

PPI has greatly reduced the banking industry’s profits. The possibility of involvement the UK big four could have in the Libor and Euribor scandals greatly harms their public image and consumer confidence towards them could fall. People claiming a PPI refund back from Barclays may have lowered in number, but Barclays is not outplaying the possibility that one of their employees could possibly be involved in the Libor scandal.

To date, PPI is the biggest and the most expensive financial scandal in the United Kingdom. According to the FOS, PPI mis selling began ten to fifteen years ago as people took out financing for properties and other investments from bank employees focused on increasing work volume for high commission.