Baanks Set Aside Awsome Amounts Of Money To Pay For Mis-Selling.

[mikey4444]

http://www.bbc.co.uk/news/business-37771838

http://www.bbc.co.uk/news/business-37778270

Is it any wonder that our banks are so hated and mis-trusted ?

This is fraud by any other name. And guess who will be paying for these huge fines ?

[Old_Geezer]

Government was garbage too. Banks should have been legally obliged to contact those affected, not expect those affected to make the contact, and allow folk to be plagued by umpteen companies calling and texting them hoping to get on the financial bandwagon. But, of course, abused citizens aren't important.

Misselling is the tip of the iceberg. Banks are owned by powerful people who know what they can probably get away with and over time has ensured governments agree with them.

[Gromit]

Rampant fraud, immunity from prosecution, and a weak regulatory Authority. - - The Banks will miss London when they all leave.

[mikey4444]

OG....Yes, you are right. But Lloyds is part-owned by the Government and that means "we" have been party to the fraud going on.

All Banks are now obliged to contact everyone who has taken a loan out, and, to be fair to them, that is what they have been doing. But it shouldn't have been allowed to happen in the first place.

PPI fraud is only the latest scandal to hit the banking sector....we still other frauds to come. Watch out for the mis-selling of free-standing AVC's.

[mikey4444]

Gromit....not sure about the immunity bit.... As can be seen from my links above, and countless others over the last few years, immunity is one luxury that the Banks seem unable to rely on.

[fiction-factory]

Yes it was systemic but I still believe that some of the misselling was actually mis buying. Many people were happy to take out PPI in order to get the loan they wanted rather than go without the loan but have now understandably jumped at the chance to claim it back. There are those that may have wanted it just in case but now with the benefit of hindsight can say they didn't need it after all. The next big one could be packaged accounts- people claiming they didn't know that they could have had free banking rather than a an account with a monthly fee and benefits. Just wait a few years, use the free travel insurance, mobile phone insurance, and then claim a few years later you didn't really want/need it so give me my £500 back.
I am never sure why misselling focuses so much on banks- what about misselling by petrol stations on motorways, overpriced double glazing, commission charges for buying tickets, misleading prices in supermarkets- there is lots of misselling going on.

[Old_Geezer]

Lloyds were bailed out in October 2008, by which time banks were already being fined for misselling. Do we know that the (partly) publicly owned bank was still misselling PPI at that time ?

[mikey4444]

FF....there is a world of difference between Motorway Service stations and the Banks !

I avoid buying anything in a Motorway Service station. I use them to urinate in and once they start charging for that, I shall irrigate their flower beds for them instead.

I refuse to boost their already excessive profits, by paying 30p over the odds for a Mars bar, that I can just as easily and more cheaply obtain from anywhere else.
In other words, none of us need to use the shopping opportunities that Motorway Service Stations have been turned into.

But I can recall when getting a bank loan was nigh on impossible, without taking PPI out.

Ditto with endowment mortgages, years ago. I can remember quite distinctly, being told that it was cheaper having an endowment mortgage, than a simple repayment type, as I would be getting barrow loads of lovely dosh back in 25 years. But the only reason for selling those types of mortgages, was that it made a bloody fortune for the salesmen involved. It was never to my advantage.

Bans have always been full of shysters and fraudsters.

[fiction-factory]

agree, sort of, on endowments and I have claimed myself as I got my mortgage from my then employer (a bank) who said the only product they offered was endowment. (I know I should have shopped around but the ease of getting it plus staff discount made it seem attractive at the time). BUT... at the time endowments were actually very attractive- older friends and family were telling me of the big surpluses they had made as the stock market boomed. Also, it made the mortgage interest only and so MIRAS tax relief was given on the full payment, and the government encouraged endowments by giving LAPPR tax relief at 15% on premiums. So at the time it was a good deal for the consumer (as well as for the life policy salesmen). But then government scrapped LAPR and MIRAS and endowment returns fell significantly. I am not sure the banks/life assurers could reasonably have foreseen all that. Hind sight is a wonderful thing now of course.

If you were forced to take out PPI to get a loan, mikey, I am not totally sure why that was misselling. Did you not get the best deal available at the time? Were you not happy to proceed with the loan on those terms at the time? There was always the option not to take out the loan. Anyway, it has been deemed misselling in many cases but I do think it is sometimes harsh on the banks

[mikey4444]

Harsh on the Banks ?

They are deceitful slime-balls !

Endowment Mortgages were invented to make Banks, Insurance Companies and Life Assurance salesmen wealthy, on a false promise that we would all be wealthy as well. But the prime purpose was to make money, huge sums of it, for the plan providers.

The great difficulty with these types of plans is that they used Low-Cost Endowments, not Full-Cost Endowments. Growth rates were hyped up, so as to make them attractive to us poor punters, while all along, vast sums were being paid out to salesmen, for years and years, in repeat commission.

Yes, greed played a part in the affair, but we should have been made aware of the dangers of future growth rates, and that was never done, which is why over 95% of Endowment Mortgages were deemed to mis-sold. That is many, many millions of Plans ! If we had of been told about the dangers of huge shortfalls in our mortgage plans, who would have taken the risk. The risks were either down-played or even ignored.

As I said there are still scandals to come. Being persuaded to come out of final-salary pension schemes, and to invest in very risky personal pensions instead was another, with the kick-on effect of Free Standing AVC's, where people were persuaded not to invest in their Employers own schemes, mostly without extra charges, but instead to pay huge charges in private schemes.

Again, invented by the FS Industry, to make money for themselves.

[fiction-factory]

My first and largest endowment policy taken out in the early 80s delivered a big profit when it matured (although the later ones did flop) and I got the benefits of LAPR and MIRAS for a while so it was a good deal but perhaps not a s great as previous generations had enjoyed. I reckon at the time (1980s) most financial journalists would have been recommending endowments. It's easy with hindsight of course to say it was usually not a good deal after all.

[Gromit]

// immunity is one luxury that the Banks seem unable to rely on. //

So if misselling is fraud, how many people have gone to prison?

[youngmafbog]

It isnt fraud though so no one goes to prison.

Plus it is difficult to tell whether all cases were mis sold. For instance it was plain to me I didnt need it and it wasnt hidden so anyone having loans from companies I had loans from were not mis sold IMHO.