I’m sure most of you remember the first ever televised debate with the leaders of the political parties. How they all promised to change the face of banking in the UK and clamp down on bankers bonuses. Ten months later, we ask what has been done to ensure that the banks don’t rip us off again and hold us to ransom by gambling away the taxpayers money.
We are still feeling the aftershocks of the banking crash that caused the recession. The banks tried to get rich by selling mortgages to anybody with a pulse, fuelling the property boom. The overinflated property prices led to excessive borrowings which could not be repaid. In the end, the borrowers were left holding properties with negative equity and huge mortgages that they were unable to service. The banks were bleeding money as they could not balance their books, and had to be bailed out by the tax payers – the very people who the banks have been screwing over for decades.
The greedy bankers walked away from this with big smiles on their faces – no punishment for their failures just business as usual and rewarded with huge bonuses again. Nick Clegg said he would break up the mega banks like Lloyds TSB – that has not happened. David Cameron said he would clamp down on bankers bonuses and has now done a u-turn saying that we need to reward the bankers or risk losing them to foreign banks.
It’s frustrating as a consumer, to have to sit and watch as the banks continue to take from the poor to give to the rich undre the protection of the MP’s who were voted in by the people to protect the people.
If you’ve borrowed money from your bank in the past ten years, chances are you were told that you must take out Payment Protection Insurance, or PPI, with your loan or credit card to increase your chances of borrowing. This is a classic example of of ppi mis selling that was common practice by the sales staff at your local bank.
After letting the banks get away with mis selling ppi to their customers for over a decade, the FSA fined imposed huge fines on the banks. Most of the major high street lenders were fined for mis selling PPI, with the Alliance & Leicester receiving the highest fine of £7.1 million. Two years on and after thousands of ppi complaints, the FSA finally got its act together and introduced guidlines on how to deal with ppi complaints, and threatened to take action against anyone who didn’t follow the new guidelines.
Unfortunatley, the banks who are a law unto themselves, decided to challenge the new guidelines in court. Led by the British Bankers Association (BBA) they have been in court since the 25th January 2011, trying to argue that the new guidelines cannot and should not be enforced. Now considering that the BBA are not arguing whether or not the banks were infact mis selling ppi, and the fact that if they lose it could cost them an estimated £5 billion you would think that there would be more said about it in the news. Add to this the fact that there are still millions of people who have been charged tousands of pounds for an insurance policy that they can not claim on when the need arises and we have a story that really is worthy of media coverage yet has had very little air time.
Fortunately, there are companies out there that are helping to raise awareness of ppi mis selling and helping people to process their ppi claims.