It was the consumer group Which? who first filed a collective complaint with the Financial Services Authority against banks in 2005. The mis-sold PPI scandal blew up when in 2011 the UK Supreme Court ruled in the FSA’s favour to impose PPI claims guidelines against the financial industry.
Today, the entire bill stands at £24 billion. Observers thought it could get worse in three ways.
Packaged Bank Accounts Takeover
After payment protection insurance mis-selling, there would be the packaged bank accounts mis-selling scandal.
For a quarter in 2015, the Financial Ombudsman noted it received a higher number of PBA complaints compared to the volume of mis-sold PPI complaints. Analysts speculated the numbers would get higher as increasing numbers of consumers voiced their dissatisfaction regarding the perks of their products.
PBAs failed to increase in number, nullifying the prediction.
Susan Plevin received her PPI refunds after the UK Supreme Court ruled the transaction was invalid. The broker had not disclosed his/her commission to Plevin upon the sale of PPI.
Observers said it could bring an additional £33 billion to the total PPI mis-selling bill.
However, because bank employees sold PPI in higher volumes than financial managers and brokers, the numbers of Plevin-related cases stayed low.
The Longest, Most Expensive Scandal Ever
Only half of the UK’s population has yet to make a claim according to analysts. With the Financial Conduct Authority initially disagreeing to impose a PPI claims deadline, financial experts said PPI would continue possibly until 2025.
However, the FCA had brought forward change with a deadline. By February 2016, a massive bank-funded advertising campaign would invite every consumer mis-sold PPI to come forward and make a claim. Amidst opposition from consumer groups, PPI claims will end by 2018.