Unintended consequences of PPI mis selling scandal
The PPI mis selling scandal has dominated the news over recent years and the total cost of bank redress has now reached £26bn. The number of people looking to reclaim mis sold PPI whilst gradually reducing still remains stubbornly high and industry experts have predicted that compensation for mis sold payment protection insurance will continue to be paid for years to come.
However there are signs now emerging that one of the unintended consequences of the PPI mis selling scandal is that many families have been put off taking out protection insurance. Solicitor Paul Cahill considers the cause of this trend.
“Industry data is showing that over half the workforce would be dependent upon state benefits if they were unable to work due to illness or injury because they haven’t taken out any protection insurance to cover themselves. This is leaving many families in a very vulnerable position. A recent study showed that almost 2.3 million people currently have been unable to work for three months or more and are claiming illness related benefits.
“Industry experts are highlighting that people don’t have the financial protection to cover themselves in case of need putting a huge number of families at risk. I believe this situation is an unintended consequence of the PPI mis selling scandal.
“Many people had previously put their trust in their bank, thinking that their interests and financial well-being would be at the heart of any products the bank sold to them. As the scale of mis sold PPI became apparent so did the extent to which their trust in the banks was misplaced. Unsurprisingly many people reached the conclusion that banks were not to be trusted when they recommended financial products.
“The PPI mis selling scandal rumbles on with new claims being made every day. It will be a long time before the banks’ tarnished reputation will be repaired - if indeed it will ever be repaired.”