The ubiquitous PPI scandal has encouraged thousands of consumers to seek compensation for potential mis-sold policies. While the door will be firmly shut for PPI claims, will there be another scandal of such magnitude?
The Oxford Dictionary defines a scandal as an “action or event… causing public outrage.” And with the banks having refunded over £34 billion to customers, as well as paying substantial fines to the Financial Conduct Authority (FCA), the PPI scandal has caused a truly tangible public outrage.
What Is the PPI scandal?
Payment Protection Insurance (PPI) was designed to cover repayments that customers were unable to make due to redundancy, ill health or death. However, the “scandal factor” was borne from the mis-selling of these PPI policies — a mammoth 64 million PPI policies were sold between 1990 and 2010.
The mis-selling of PPI, which subsequently gave birth to the PPI scandal, is determined by some devious sales infringements, including:
- Customers being misinformed that PPI was compulsory
- Customers’ employment status not being taken into account
- Customers’ medical conditions not being considered
- PPI being added without customers’ consent
- Customers not being informed about the commission on a PPI sale (Plevin rule).
With billions of pounds rightfully returned to customers, the “scandal” bordered on “pandemic”. However, the FCA selected the 29th August 2019 as the final deadline for anyone who wishes to process a PPI claim, finally giving some respite to the PPI scandal.
Although it’s highly unlikely that the PPI scandal can be matched in terms of impact and numbers, there are a few scenarios vigilant customers and companies may want to look out for.
Data Protection Breaches
Since the implementation of the General Data Protection Regulation (GDPR), companies have ensured they are compliant with the new regulations. However, any relevant breach of data could lead customers to seek compensation. If businesses miss just a single data protection note, a new customer-related scandal may well be on the horizon.
In 2018, the highly publicised lender Wonga fell into administration. The company blamed its downfall on an ever-increasing number of claims. In fact, the industry adjudicator, the Financial Ombudsman Service (FOS), criticised the actions and behaviour of payday lenders (post-Wonga) after a 130% rise in complaints.
Thousands of owners who have bought property on a leasehold basis have found themselves trapped in properties they cannot shift or even amend without having to pay for it. It is little wonder that this is nicknamed the “PPI of the housing industry”.
Although the numbers don’t quite compare to the PPI scandal, the £40 million worth of refunds made to customers who were mis-sold pensions is an alarming number. The mis-selling of pensions shares similarities with the process of PPI being mis-sold, making it a possible contender for the unwelcome title of the “next big scandal”. Just like the PPI scandal, it is reported that people were ill-informed about their pensions, resulting in poor choices and an inevitable rise in claims.
The FCA formally began regulating the crowdfunding industry in 2014, with concerns that this FinTech success story may be the culprit of the next big PPI scandal. There are over 100 online crowdfunding platforms allowing customers to lend or invest in fund-seekers’ projects.
Although the FCA does not wish to inhibit innovation, it has had to act in accordance with the ever-rising figures on display. From 2013 to 2015 alone, crowdfunding raised about £2.7 billion — a five-fold increase. Additionally, naivety could also trigger a scandal within this industry, with rising concerns that investors on these loan-based crowdfunding platforms had little idea about the risk they were being exposed to.
Whenever the stakes are high and customers are exchanging money for services, there will always be the potential of a catastrophic loophole. It’s important to note that the PPI scandal may not be matched for its volume or ubiquitous nature, but if you do feel that you are rightfully owed compensation for a mis-sold financial service, it’s always advised to act swiftly.
Are you looking to make a PPI claim? As one of the leading PPI claims management companies, Canary Claims can help you recover the money you’re rightfully earned, but you must act before the August deadline. Start your claim today.