PPI scandal turning ‘portions of Britain into fraudsters’, Barclays boss claims
The PPI scandal has turned “portions of Britain” into fraudsters, Barclays chairman John McFarlane has claimed.
McFarlane, said it was “inconceivable” that all the payment protection insurance mis-selling claims that had helped fuel a “flat-screen television” buying spree were genuine.
He also accused the government of being complicit in the weakening of the banks by promoting a compensation culture, in an interview with the Mail of Sunday.
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“The percentage of fraudulent claims is enormous.
“It is almost inconceivable to think that £50bn was mis-sold.
“We have turned portions of Britain into fraudsters."
Banks and insurance companies have had to pay out more than £30bn to compensate customers mis-sold PPI since 2011.
The total figure is expected to rise ahead of the deadline for claims in August next year and could reach £50bn.
Barclays has set aside a further £700m to meet compensation claims for mis-sold payment protection insurance – and that amount is understood to be open to review.
McFarlane said: “It was in the government's interests [for claimants to receive compensation]: consumer spending rose and it weakened the banks, so the government is complicit here in the decline of the City.
He added: “This is stimulation of the economy by buying flat-screen televisions.”
Payment protection insurance is designed to cover loans, mortgages or credit card repayments in the event of an accident, sickness or in some cases unemployment.
The scandal began when Citizens Advice launched a “super complaint”.
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The Financial Services Authority then began imposing fines for PPI mis-selling in 2006 and the Office for Fair Trading waded in the following year, referring the issue to the Competition Commission.
In 2011 a court ruling ordered the banks to contact customers offering compensation.
Last year the FCA launched a £42m ad campaign, featuring Arnold Schwarzenegger, to encourage fresh claims ahead of the August 2019 deadline.