Time to call an end to the PPI farce
Consumers have had almost five years now in which to claim compensation for mis-sold payment protection insurance, yet the regulator has indicated that this sorry saga is likely to drag on for at least another two years.
While it’s right that those who were mis-sold PPI have the opportunity to get their money back, surely half a decade is enough time to ensure this is achieved.
It beggars belief that there are people out there yet to make a claim, although in reality many probably aren’t that bothered until they get pressurised into doing so.
So far PPI has cost the banks in excess of £25bn, with around £5bn boosting the profits of the claims -management companies – yes, those same firms that have made our lives a misery with their constant cold calling.
It’s a farcical situation but the Government is in no hurry to draw a line in the sand as this stealth tax on high-street banks has injected a valuable stream of cash into the UK economy. But what has been the cost to the rest of us?
How much more reliable would bank IT systems be if those billions in compensation hadn’t made a huge hole in annual profits? How many bank staff have lost their jobs? And how many bank branches have closed while the claims companies enjoy their bonanzas?
I’m not usually one to stick up for the banks but we now have an unhealthy compensation culture in this country, with too many thinking it’s fine to make a claim against them. And remember: PPI may still have another couple of years to run but the claims- management industry already has eyes on its next pot of gold – packaged bank accounts.
How many times have you rushed to answer the phone only to find it’s yet another PPI nuisance call? And how many old and vulnerable people are now reluctant to pick up the handset even when it may be a friend or relative.
Type PPI into your search engine and you’ll be astonished by the number of vultures that have sprung from nowhere to make some easy money at the expense of the UK financial services sector.
Away from the greed and constant excuses to bash the banks every time complaints figures are published, there is a far more serious consequence of this insurance fiasco.
Clearly PPI was barely fit for purpose, but the non-stop barrage of negativity around this now-defunct product means that people are now reluctant to consider life insurance or protection of any kind.
Insurers are in a similar situation to the banks in that they too have been dragged through the mud and lost the trust of the public.
More than 10 million people have been paid compensation to date, and if you’re one of those who haven’t claimed then there are probably one of two reasons why: either you live on another planet or perhaps you are one of those consumers who actually saw some benefit in their PPI policy, which paid out when you lost your job or were off work sick.
Five years on – and £26bn and counting later – it really is time to bring this PPI mess to a conclusion and let our banks get on with running their businesses, without this albatross distracting them from doing their day job.
It beggars belief that people are out there who are yet to make a claim
Andrew Hagger is an independent personal finance analyst from www.money comms.co.uk