RBS & The PPI Scandal
Roughly 45 million PPI policies were mis-sold over the course of 20 years from 1990. UK banks have so far paid out £24 billion in compensation and the 5 biggest banks in the UK have set aside a further £32.6 billion to deal with the total compensation bill.
This has meant that the likes of RBS have had to fork out millions to pay back customers and settle large fines that have been used as a way of punishing the moral, legal and ethical lapses that they have exhibited when selling PPI policies.
5 biggest banks in the UK have set aside a further £32.6 billion to deal with the total compensation bill.
What is PPI?
To make sense of how Payment Protection Insurance came to be such a considerable scandal it’s vital to study the background.
PPI was a form of insurance that covered repayments on finance products such as loans, mortgages and credit if the customer was unable to meet financial obligations.
People may be covered if they were unable to work because of:
Start a Claim with PPI.co.uk
Recent figures estimate that over half of all claims that are made without the guidance of a company like PPI.co.uk are rejected. This is because the claimant either hasn’t got the access to the required information or because they don’t have the experience of dealing with the way RBS works.
PPI.co.uk has been guiding our customers since 2007 getting refunds for them is exactly what we strive to do and during this period we’ve been able to achieve over 160,000 successful refunds totalling more than £274 million.
Cases of PPI are so rarely the same, and some, mostly aged policies are very difficult to achieve results on. We pride ourselves on our ability to navigate the tough policies and have built an upstanding reputation because of it.
Because of our standing in the industry we have brokered a deal with the major banks and lenders, which means that we’re not required to submit anything more than a name, date of birth and an address at the time the policy was taken out. Once the banks have this information they’re able to access their databases and determine if any PPI was added onto any finance you may have taken out.
The FCA has introduced a PPI ‘claim by’ deadline for 2019. The big five banks have paid out £24bn in compensation so far and have set aside a further 32.6bn to deal with the estimated claims that will come forward between now and then. It’s estimated that the surge of claims could cause back logs so it is essential that if you feel you were mis-sold PPI at any time then you begin a free check with us today before it’s too late!
RBS: The Origins
These days RBS and their subsidiary brands are cobbled together from hundreds of past banks – large, small, city, traditional and innovative.
The Royal Bank of Scotland was founded in Edinburgh in 1727. It went on to become one of the biggest banks in Scotland. Several of the brands are actually older than the bank itself, having been established by the London goldsmiths who were Britain’s first bankers. These are:
- Child & Co, the oldest name still trading in British banking, dating back to the 1640s.
- Coutts, the most famous private bank of all, establish in the 1692
- Drummonds, founded in the 1700s.
RBS is a much more familiar name, growing through 300 years of history and with more than 200 separate businesses, which were established in towns and cities all over the country. The specialist sectors have rich histories also:
- Lombard traces its origins to a railway wagon leasing company established in the mid-1860’s.
- Holt’s started as an army pay agency in the early 1800’s.
- Ulster Bank is another of their best-known brands and was established in Belfast in 1836, as a bank run by and for the benefit of Ulster people, before spreading rapidly through Ireland.
- Isle of Man Bank was the first company to be formed under the Isle of Man’s Companies Act of 1865. It has remained there ever since.
How Did PPI Come About?
The issues surrounding PPI were first raised towards the late nineties by the industry leading consumer company Which? – who questioned the expense and the deliberate exclusions in the terms and conditions.
By 2006, small finance companies were being stung with fines and enforcement procedures by the FSA for mis-selling. In 2007, the major companies who thought themselves immune were seeing their PPI empire start to crumble under major pressure.
This included a £2.8 million fine for RBS for poor complaints handling. The FSA claimed that there was an ‘unacceptably high risk’ customers may not have been treated fairly. Problems included delays in responding to customers, poor research, and failing to address concerns in replies and not informing consumers of their right to take their issues to the Financial Ombudsman Service.
The FOS finally got involved in the scandal in 2008, and ordered the FSA to properly review how firms were handling PPI complaints.
How was PPI Mis-Sold?
In quite a few cases, PPI was added onto a policy without the customer’s prior consent and the banks were able to hide away monthly repayments within the regular loan amount. Banking staff would often use dishonest tactics when it came to attaching policies.
The policies that were sold in these cases would often not cover the individual and leave people unable to use the benefits that they were paying a lot of money for.
Another form of mis-selling happened when sales advisors failed to clarify to the customer that a PPI policy was optional and they were free to opt-out or even purchase the insurance elsewhere if they wanted to.
UK mis-sold PPI scandal statistics
£10 BillionIn payouts alone in the UK.
By 2008, 20 million PPI policies existed in the UK that’s nearly 1 in 3 of the 2008 UK population
So What Does This Mean?
In 2015 the Financial Conduct Authority (FCA) allowed customers who had their initial complaints rejected the right to appeal to the Financial Ombudsman Service. This means that thousands of people who initially had their claims rejected were allowed to have a second chance in claiming back mis-sold PPI. This meant that RBS would pay back thousands of PPI claims that have been wrongly rejected.
Until very recently, PPI was sold at the time you took out a loan, credit card, or mortgage deal. Policies were often sold to people when they weren’t eligible for cover. If you remember any such conversation, there’s a chance you were mis-sold PPI and can claim.
Claiming Directly to RBS
To have a valid PPI claim for a refund directly with RBS you will need to provide RBS with as much information about your PPI claim as possible. According to RBS and most banks, the information that is required of you is as follows:
- PPI policy number.
- Details of the key dates of the policy.
- Information about how the policy was sold.
- Employment status at the time the policy was sold.
- Details of any savings or other insurances you had when you took out the policy.
- What you took out the finance for and the amount you paid off.
If you have attempted to claim back PPI and you were rejected, then don’t give up. You can contact the FOS (Financial Ombudsman Service). They will independently assess your claim and decide if your case is worth pursuing or not, alternatively you can contact ppi.co.uk.