They thought it was all over. It isn’t now. Greybeards in business journalism tell of how the payment protection insurance (PPI) scandal was once fresh and ground-breaking.
That was in the late 1990s. The banking regulators then got involved in 2005, when the story about mis-selling loan insurance still had obvious and deserved momentum.
The later involvement of parliamentary committees, the old Office of Fair Trading and then-Competition Commission, and the High Court, plus big regulatory fines for the mis-selling, not to mention the £30 billion or so set aside by the banks to meet the total bill for PPI, all kept the story deservedly alive as the years went by.
But as the flood of PPI claims inevitably slowed, a feeling developed, within the media as much as the banking sector, that although it was the banking industry’s costliest scandal it was finally coming to a natural denouement.
However, the banks were jolted late last year when the Financial Conduct Authority (FCA), which succeeded the Financial Services Authority, declared a deadline of spring 2018 for further claims.
That looked pretty distant after all that had passed, and banks were not shy in expressing their dismay. Now the FCA has jolted the sector again by extending the cut-off for new claims by more than another year to June 2019.
Joy will not be unconfined for the big five of Lloyds (the biggest PPI culprit), Barclays, HSBC, Royal Bank of Scotland and Santander. It is estimated the new deadline could cost them another £1bn.
A marketing campaign to advertise the new deadline will begin next June, presumably to alert potential claimants who have not so far thought the issue might affect them despite well over a decade of publicity on the scandal.
Better late, than never. Banking is not an easy sector to be buddies with given its transparent hubris, greed and tin-ear for the wisdom of crowds that has clearly seen through its endemic hocus-pocus.
But, with PPI, the sheer scale of the financial restitution and timespan suggests the new extended deadline for claims has as much to do with regulatory overkill as concern for members of the public affected. Without wishing to sound busted-flush Blairite about it, on PPI it really is time to move on.