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Banks still “paying the price” for PPI scandal


Banks are still “paying the price” for the PPI scandal 10 years after the problem erupted, according to Citizens Advice.

Since the problem was first discovered, the UKs banks have paid over £20 billion in compensation. This figure is only set to grow as people continue to seek guidance from Citizens Advice about being mis-sold PPI.

People who had been sold PPI policies were advised that they would be protected if they lost their jobs or fell ill, but many people did not need the policies in the first place or could not claim on them due to their circumstances. Others did not even know that they were paying for them.

As well as compensation for mis-selling, some banks have been fined by the Financial Conduct Authority for the mishandling of people’s complaints. Earlier this year Lloyds was fined a record £117million.

Gillian Guy, Chief Executive of Citizens Advice, said:
“The PPI scandal reached pandemic proportions. It is a real lesson for banks and the wider industry that they cannot get away with mistreating their customers.

“After dragging its feet when we first raised concern about PPI the industry is paying the price for not taking action sooner.

“Our super complaint was a game changer in forcing the industry to compensate for their mis-selling. This has helped people get millions of pounds back in their pocket.

“While regulation and banks’ approach to customer service has improved in recent years the seismic failings around PPI should serve as a constant reminder that firms cannot get away with ripping off customers.”

In recent months major banks have said that they are now putting increased sums of money away to cover upcoming PPI compensation payouts.

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