Payment protection insurance (PPI) mis selling today has £23 billion in recompense . This is a historically high amount of compensation compared to past UK financial scandals. Here are some facts that make PPI the icon of UK finance fraud and recompense.
During the 1990s, UK banks marketed zero dividend preference shares as a profitable financial product. However high debt cross-holdings and the splitting of several trusts depreciated left the stock market down on its knees by the arrival of the 21st century. In total, UK banks paid for £195 million.
Precipice bonds only cost the UK banks £7.3 billion for marketing income bonds as linked with FTSE 100 and other similar indices in the stock market. The high demand created a bubble, which burst as record capital losses made it one of the monumental financial scandals in the history of the United Kingdom.
Broker funds allowed unqualified financial advisers to charge customers with high front payments and very low returns. This created a ruckus in the insurance industry, claiming less than £100 million in recompense.
The latest had been the mortgage endowment products that allowed homeowners to repay their mortgages and make a little money on the side with a tax-free lump sum once the product matured. However because of the high inflation during the 1990s (the product was made in the 1970s) being under control, home values deflated and the endowments only gave poor returns. This left banks paying off £3 billion worth in compensation.