PPI fines from 2005 to present day
Everybody has heard about the PPI mis-selling scandal haven’t they?
If you haven’t, where have you been?
Whilst the vast majority of us have heard of PPI, how many actually know what it is, how it was mis-sold, and the reasons it was mis-sold?
If you’d like to brush up on the whole PPI story, and get the above questions answered, we’ve gone into greater detail on our PPI page, which you can reach here.
In this post, we’re going to take a look at the PPI fines that have been handed out, who to, and what for.
Fines versus compensation
Firstly, we need to establish that the fines handed out are not included in the compensation payments that banks and lenders have paid out, and put aside.
With the main banks (Lloyds, Barclays, HSBC, RBS / Natwest), having set aside billions to compensate customers, and the bill rising consistently, we investigate whether the sector has been discouraged by the fines and compensation or whether the profits still outweigh the costs.
5th September 2006: The Financial Services Authority (FSA) fined Regency Mortgage Corporation £56,000 for failures in it’s mortgage PPI sales techniques.
26th October 2006: A fine of £455,000 is handed to loans.co.uk, a broker for telephone PPI sales failures, affecting over 44,000 customers.
20th December 2006: The FSA fined home shopping company, Redcats, £270,000 for PPI selling failures which could have affected up to 160,000 of it’s customers.
15th February 2007: Capital One were given a fine of £175,000 for failing to provide 50,000 customers important information following a PPI sale. The culture of selling PPI within Capital One could have affected up to 335,000 customers.
6th September 2007: Hadenglen Home Finance were issued with a £133,332 fine, and it’s Chief Executive, Richard Hayes, was fined £49,000, in the first instance that a fine had been handed to both the company, and it’s CEO. Quite astonishingly, Mr Hayes has still been allowed, and continues to be involved in various companies that sell mortgage and insurance products.
12th May 2008: The FSA gave Land of Leather a £210,000 fine and also slapped it’s Cheif Executive, Paul Briant, with a £14,000 fine. Including Land of Leather, Mr Briant has been part of 28 companies that have been dissolved!
30th July 2008: Liverpool Victoria, now commonly known as LV=, were hit with a £840,000 fine for non-compliant PPI sales carried out over the telephone. Of the 90 calls listened to by the regulator, it found over 60% were not compliant. It also found that pressure tactics were used, and that the cost and product explanation were not carried out satisfactorily.
21st August 2008: In one hit, the FSA fined five car dealerships that exposed 2,175 customers to risk of purchasing unsuitable PPI policies. The dealerships were GK Group Limited, George White Motors Ltd, Ringway Garages (Leeds) Limited, Ringways Garages (Doncaster) Limited and Park’s of Hamilton (Holdings) Limited. Together they received a fine of over£175,000.
9th July 2010: David Head, a director of Essex based mortgage and insurance broker, FT Compliance Services Ltd, was issued with a £10,500 fine for failing to properly supervise insurance brokers. Mr Head is still involved in the finance industry as is currently a director of a financial advisory firm!
3rd May 2012: UK Car Group Limited were hit with a £91,000 fine for the failings of it’s representative, CC Automative Ltd, trading as Carcraft. Indeed, Carcraft’s own internal audits raised concerns, but it appears they were simply not acted upon.
12th December 2012: Three directors, Christopher Ollerenshaw, Thomas Reeh and Adrian Childs were each given fines of £100,000 (Ollerenshaw), £75,000 (Reeh) and £50,000 (Childs). Ollerenshaw and Reeh eventually paid £50,000 and £10,000 following claims of financial hardship, whilst Childs got away with not paying anything after declaring himself bankrupt previously.
11th December 2013: It’s the Lloyds Banking Group again! This time, a £28,038,800 fine due to serious failings in the controls and incentive schemes given to staff for selling various products, including protection insurance, thus encouraging a culture of mis-selling.
16th April 2015: The biggest PPI fine at the time, £20,678,300 is handed to Clydesdale Bank who, along with it’s sister company, Yorkshire Bank, failed to handle complaints fairly, failed to take into account all evidence, manipulated documentation in an attempt to show no PPI had been added when in fact it had. Perhaps the most alarming of all, the bank was found to have provided false information to the Financial Ombudsman Service.
5th June 2015: The record PPI fine at almost £100m higher that the previous, the Lloyds Banking Group are hit with a £117,430,600 fine for mis-handling valid PPI complaints. The bank, which includes Lloyds, Halifax, Bank of Scotland and Blackhorse are ordered to reopen and uphold 1.2m complaints which was estimated to cost the group an extra £710m. Complaint handling staff were advised that the group had not mis-sold PPI and told to reject complaints unless specifically told otherwise!
1st June 2016: CT Capital are fined £2,360,900 for failing to handle thousands of complaints fairly. CT Capital had a policy of automatically rejecting claims against credit agreements taken out over six years prior to the claim, and rejected claims even when the recorded call from the sale of the policy was considered to be non-compliant.
In total to date, the regulators have dished out fines of £184,432,400 for PPI and PPI related offences.
You may be thinking that such fines would be a deterrent to the industry?
However, even if you add the almost £185 million to the £39 billion compensation that banks and lenders have set aside to compensate customers, it doesn’t come close to the profits that were generated during the mis-selling scandal.
With 34 MILLION policies sold since 2001, worth £50 BILLION, that’s almost a £11 BILLION profit for the banks after paying out compensation and fines.
It is important to remember that this figure doesn’t take into account policies sold prior to 2001, or the profits generate via interest charged on the PPI premiums.
Not a bad result for the banks really is it when you consider they’ve still walked away with billions in their pockets, hardly a deterrent for future scandals?
Have you had PPI?
PPI was sold on all forms of credit, such as mortgages, loans, car finance, hire purchase agreements, credit cards and store cards.
Not sure whether you’ve been sold PPI?
Our fast and comprehensive checking systems that have been set up with almost all banks allows us to find out whether you’ve been one of the millions who have had PPI.
Not sure whether you qualify? Check here to see whether you may.
Want to know how much you may be owed? Why not try our PPI calculator.
Making a PPI Claim
Option #1: Fill in the ‘Start Your Claim’ form on this page. We’ll send you out a form in the post for you to complete. Once we’ve received the form back in the freepost envelope we provide, we’ll make a start on your PPI claim.
Option #2: Click the ‘Download Claim Pack’ button. Simply print out the form, complete it and send it back to us. Our address and email address can be found here.
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