Lloyds to pay £3.2bn for mis-selling PPI policies

Bank trainee?

Lloyds Banking Group has set aside £3.2bn to pay compensation to customers who were mis-sold payment protection insurance (PPI). This decision follows a high court ruling over the scandal. The bank is inviting past purchasers of PPI to get in contact and lodge a claim for compensation if they think they were mis-sold the policies. Well, that will be a deluge because whichever way you look at it people either got a policy that was never likely to pay out or they were forced to have the policy in order to get the loan.

PPI policies are supposed to cover loan repayments if someone falls ill, has an accident or loses their job. The huge bill has pushed Lloyds into the red to the tune of £3.47 billion. Shareholders be warned. Taxpayers look out!

Angela Knight of the British Bankers' Association will be miffed to highest miffery. But she's been overseeing this bunch of legalised cowboys since she lost her seat in parliament in 1997 and saw the light touch of Gordon Brown and Tony Blair descend upon the profession of banking. Not much said whilst New Labour set about new banking.

Lloyds chief executive Antonio Horta-Osorio has basically stuffed the BBA's case. "We will no longer be participating in the BBA's judicial review," he said. "We do not want to continue a long-standing debate of this with the regulator."

Long-standing debate? This is no debate. He and his cronies have been engaged in a despicable money-making scam designed to maximise profits whilst leaving customers with a product that singularly failed to meet expectations.

We should have let the whole stinking ship sink whilst we had a chance. Even paying compensation to savers would have been better than see this black horse limp towards the knackers yard.

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Banks lose Payment Protection Insurance (PPI) judicial review

British banks, and that includes finance house, credit card issuers and other assorted moneylenders, have lost a judicial review that could have a major impact on whether more compensation has to be paid on mis-sold loan insurance. The whole practice of selling insurance like this has been a green-eyed monster as far as the banks are concerned. The day they decided to leave proper banking behind and become as spivs behind computers that was the day we were on a slippery slope.

Most of the PPI sold was never intended to be cashed in on. The wording was either so convoluted or devoid of meaning that they were virtually useless from the start. Many people were sold the product when they either did not need it, require it or want it. It was purely driven by commission greed. And for those that did require it, many found their straightened circumstances due to unemployment, illness or whatever, resulted in an inability to secure settlement to pay for their finance instalments. Those that have got into difficulty have had their loan accounts closed and sold at knock down prices to avaricious debt chasers, who care little for the niceties of contracts. And in many cases the banks cashed in on their own debt insurance! Goose and ganders don't apply here. It's just the bloody sauce of it all.

Thankfully, the judges saw through the flimsy arguments of the banks. Just like MPs saw through the erstwhile Northern Rock directors. One has to remember it was these banks that thought peddling a toxic mix of regurgitated sub-prime loans and Lehman Brothers "vehicles" was the panacea for the world. I don't think they are contrite yet. I think it is still business as usual. Or usual since proper banking ceased. Somebody is going to have to deal with them soon. I thought Vince Cable was that guy, but seems not. We'll have to wait and see.

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