How PPI Scandals Came To Existence insurance

Sometimes things created for good start harming the system themselves. The same is happening with Payment Protection Insurance policies. The business of selling PPI has become quite lucrative for some banks and financial institutions. PPIs were created to cover the monthly repayments of loans and mortgages for people who fell short of income to pay their premiums. However, they soon became expensive, ineffective, mis-sold and inefficient because of the numerous scams. In this article we’ll try to find out the history of PPI scams and how they became so common in the marketplace.

According to critics, the timeline of these scams dates back to 1990s because since then PPI policies are being sold along with mortgages. Various banks of Britain started selling these policies aggressively for their own profit. In 2004 it was reported by British Newspaper “The Guardian” that several banks were returning only 15% of their PPI income to clients, which makes PPI more profitable than the car or house insurance business for banks.

It was discovered that two large banks of the UK named Barclays and HBOS were making huge profits from PPI policies. The following year an inquiry was set up due to intense pressure of Citizens Advice. The following facts were found in investigation:

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