Not content with creating credit out of thin air and selling it to governments, companies, small businesses, and Joe Public at interest, not content with selling what financial analyst Max Keiser called “empty boxes” (mortgage backed securities), not content with vanishing hundreds of billions of pounds into thin air and then demanding the government bail them out, not content with awarding their “valuable” staff massive bonuses in times of austerity paid for by the taxpayer, Britain’s banks have been engaging in outright fraud, ripping off customers by selling them a product they didn’t want, didn’t need, and oftentimes couldn’t use. Now, for once, they have been brought to book, not by the government – that would be asking too much – but by the courts, for misselling payment protection insurance.
When people borrow money from a bank, one of their major concerns is that should they fall ill, become temporarily incapacitated or made redundant, their loan repayments will be covered. PPI is there, ostensibly, to ensure this happens, and is available as an add-on in the form of an overdraft or loan. It is for a finite period, usually twelve months, after which the borrower must find other ways to repay the debt. This sounds not only fair but sensible. It did to Jason Billingham, but as he told the BBC
, after he fell ill and tried to make a claim, he was told that he’d been sold a policy that was useless to him: “(I) had a very short telephone conversation with a lady...to find out that I couldn’t claim... because I was self-employed. ..I was flabbergasted really, didn’t know what to say.”
If Mr Billingham’s case were exceptional, well, we all make mistakes, but out of 16 million policies sold, there have been around 2 million complaints, and it is estimated that there could be as many as 4 million victims in all.
Like Mr Billingham, hundreds of thousands of others if not millions have been pressurised or duped into buying a product they don’t need or even cannot use. In simple English, this constitutes fraud, and fraud is theft. If a shopkeeper sells a customer twelve tins of baked beans and charges for thirteen, intentionally, that is theft. If at the end of his week in the Sun, a tourist hands his Visa card to a hotelier and finds later he has been charged for three evening meals or even a cheese sandwich which he didn’t order, if mens rea
– intent – can be proved, that amounts to theft, which is a criminal act. The banks were clearly involved in a fraudulent enterprise, a massive conspiracy to rip off the public.
As a result of countless complaints, the Financial Services Authority
and the Financial Ombudsman Service brought an action against the banks. The resulting hearings which involved extremely complex legal argument, ended in the Administrative Court on April 20 when in a lengthy judgment
, Mr Justice Ouseley rejected the bankers’ counter arguments and found for the FSA – and thereby for millions of bank customers. He finished his judgment with the words: “I grant permission to argue all three grounds, but dismiss them.”
All the big banks were involved: Barclays, Royal Bank of Scotland, Lloyds, to name but three. Yesterday, the British Bankers’ Association announced it would not appeal, leaving the way open for all the victims of this fraud to reclaim their money. And it doesn’t end there, because the banks will actively have to seek out customers (ie victims) who were missold PPI, and reimburse them. Martin Lewis of MoneySavingExpert said
"This is a wonderful day for consumers. For once, the banks have done the right thing and backed down. As much as £9 billion that was wrongly taken from consumers could now be paid back...Everyone who has got or had a loan or credit card in the last six years should check their policy now to see if they have this insurance. If you do, and were told it was compulsory, if you were given employment cover but you were self-employed, or if you were not asked about a pre-existing condition, you are likely to be a mis-selling victim.”
Predictably, the banks were not gracious in defeat, and shortly after the judgment, there was a warning that charges may have to be increased to recover their losses
, totally missing the point that this is not their
losses because the money they claim to have lost was not theirs in the first place.
If you a thief picks your pocket, is caught and ordered to return your wallet, and turns and says: “Sheesh, that’s an awful lot of money for me to lose, I’ll have to recover it by picking someone else’s pocket”, what would the arresting officer say?
Greed is not good. And neither is theft.