Banks and building societies have never had an easy time from the public. People are very quick to share their negative opinions with anyone who will listen and a quick search on the internet will show many positive and negative reviews of exactly the same bank. However, recent years have seen more scandals than normal. Banks have continually underperformed, chief executives have been handed huge bonuses regardless of performance, Northern Rock had to be rescued from the brink of collapse and a whole country even went bankrupt.
The Office of Fair Trading found that banks were overcharging customers with their bank charges. A large investigation took place, new charges were introduced and it opened up the chance for customers to claim back their bank charges. This scandal really rocked the reputation of the banking industry. Following on from this, payment protection insurance (PPI) was investigated after a rise in complaints from customers. Following an initial investigation, the Competition Commissioner revealed that very few claims were actually paid out. This led to a more in depth investigation which has resulted in the PPI claims situation we see now that has again rocked the banking industry.
The mis selling of PPI was on such a large scale that it really has shown the lenders in a bad light. PPI compensation claims are reaching into tens of millions of pounds and there are still many more PPI Refunds to be processed. PPI policies were so profitable for the financial institutions that many payment protection insurance policies were sold aggressively or using underhand tactics to secure a sale. This has caused a flood of PPI Refund requests and has enforced the perception that lenders only have their own interests at heart and will do anything to generate their profits.
The Ombudsman and Financial Services Authority have dealt with both the bank charges and PPI Compensation scandals. In both situations they have had to encourage the banking industry to pay out for valid PPI Refund claims when they have dragged their heels. In both situations, the lending industry has tried to gain court rulings to avoid paying out on cases. This led to public criticism of banks appearing to duck their responsibilities.
With PPI refund figures set to rise over the next few months, banks have got a large task ahead of them proving that they are dealing with problems and addressing customers' needs. Transparency of current policies is needed so that banks can improve their image.
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Nik Jones is a professional PPI Advisor at PPI Refund. For any type of PPI refund or PPI claims, call for free on 0800 044 5196.
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