The PPI Claims Scandal
The PPI (payment protection insurance) Claims Scandal is perhaps the biggest scandal in the financial history of United Kingdom. The scandal started in 1998 and its aftershocks are set to last till 2018 with a staggering cost of 35 billion pounds.
It all started in 1998 when it was first identified as poor value product. Over the next 8 years FSA took certain evaluative and punitive measures against the PPI for bad business practices (including mis-selling and unfair treatment of customers).
In 2009 FSA issued a consultation paper on how to handle PPI complaints. In 2010 banks placed all PPI claims on hold pending outcome of a judicial review. An ensuing legal battle between Banks FSA/FOS was decided in favor of FSA and banks withdrew their legal challenges.
However PPI became the most complained product and banks were fined with hundreds of millions of pounds for non compliance of FCA rules regarding PPI payouts.
Matter is again in the court and a decision is expected by 2016 to impose a deadline for payouts of PPI claims.