The Courier & Advertiser (Fife Edition)
Lesson in how to beat the banks?
A whopping £1 billion could remain unclaimed in the Dundee area from the mis-selling of payment protection insurance (PPI). Michael Alexander reports
It is one of the banking industry’s biggest scandals – the mis-selling of payment protection insurance (PPI) on an industrial scale. Now, following the announcement that August 29 2019 has been set as the final deadline for people wanting to make claims, a Tayside financial expert has warned millions of pounds in mis-sold products remain unchallenged.
Mike Begg, director at Dundee-based Beat the Banks, has recovered more than £18 million for residents of Tayside and North Fife so far.
However, he believes that with 45 million policies sold UK-wide over the 20 years from 1990, the amount of missold PPI could amount to up to £1 billion in Dundee alone, with up to £50bn unclaimed UK-wide.
He believes consumers in Dundee may have suffered disproportionately because banks employing a “hard sell culture” in the 1990s often targeted the customers least able to afford it in areas of deprivation.
Mike, 55, a former Clydesdale Bank manager in Tayside and Fife, who switched sides after becoming disillusioned with what he saw as the greed of the banking industry, has been pursuing claims on behalf of residents across Scotland for six years. Final deadline The average payout is about £2,000 although one person in Tayside received more than £200,000.
“PPI was loan repayment protection if you were off ill or if you lost your job,” explains Mike, a former Arbroath High School pupil who started his banking career aged 18 in Broughty Ferry, going on to work in management across Tayside and Fife.
“It was applied on personal loans, credit cards, secured loans, store cards, club accounts, mortgages and occasionally on car finance.
“But it became clear that it was missold on an industrial scale to people who didn’t want or need it – or would not be eligible to claim on it.”
People may now be able to complain if they think their provider earned a high level of commission from their PPI and this was not made clear to them when they bought it.
The final deadline of August 29 2019 has been set by the Financial Conduct Authority (FCA) in an effort to draw a line under the scandal.
Millions have already been compensated and the biggest five banks – Lloyds, Barclays, RBS, HSBC and Santander – have collectively set aside more than £35bn to cover the cost overall, with the public receiving back £26 billion UK-wide since 2010.
Most of the big banks have also faced hefty fines, including the Clydesdale which was fined a record £20.6m by the FCA in April 2015 for serious failings in its PPI complaint handling processes.
However, some consumer groups have criticised the manner of the compensation system, arguing banks should have been proactively finding and paying back customers who were mis-sold PPI. Overturned Martin Lewis, the founder of Moneysavingexpert, said: “The deadline is a mistake. The stats are plain.
“Flabbergastingly, in over half of all cases where after the bank rejects a PPI reclaim people take it to the independent ombudsman, the bank’s rejection is overturned.
“Until we can trust banks to deal with complaints fairly in the first instance, this move to protect their balance sheets should not happen.”
Andrew Bailey, chief executive of the FCA, said:“We have carefully considered the feedback we received and we still believe that introducing a deadline for PPI complaints and a communications campaign warning of the deadline will benefit consumers.”
It became clear it was mis-sold on an industrial scale