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PPI scandal: 'We did nothing wrong,' says BBA

In the wake of the PPI mis-selling debacle, the British Bankers' Association is torn between defending the banks' behaviour and admitting it got it wrong.

PPI scandal: 'We did nothing wrong,' says BBA

In the wake of the PPI mis-selling debacle, the British Bankers' Association is torn between defending the banks' behaviour and admitting it got it wrong.

Nearly two months after abandoning its legal battle over payment protection insurance (PPI) mis-selling, the British Bankers' Association (BBA) is still desperately trying to defend the banks’ behaviour.

‘We felt we had complied entirely of what was required,’ Eric Leenders, executive director of retail banking at the BBA, told the audience at an event hosted by consumer group Which? on Monday.

In April, the High Court rejected the BBA’s claim that it was unfair for the Financial Services Authority (FSA) to apply new rules on how PPI should be sold retrospectively, effectively ordering the banks to review past complaints and pay out billions in compensation.

As Clare Spottiswoode, a member of the Independent Commission on Banking, said: ‘It was obvious from day one that the banks were not treating customers fairly’.

So why is Leenders still trying to defend the banks – and better yet the BBA’s decision to take the regulator to court when it was fairly obvious the banks were in the wrong?

Interestingly, BBA representatives attending its annual conference yesterday appeared far more sheepish about the whole PPI affair.

Angela Knight, chief executive of the BBA, said: ‘The banks have made mistakes. They have apologised. They are putting the errors right’.

Marcus Agius, chairman of the BBA, said: ‘PPI was a product where, in many instances, we got things wrong and let our customers down. Yes, we have apologised and, yes, we are putting things right’.

So which is it BBA? Are you sorry or not?

(More video footage of the Which? event on banking regulation reform to come.)

6 comments so far. Why not have your say?

Neil Sinclair

Jun 30, 2011 at 19:22

A few months ago I received a cold call from a salesman trying to sell me loan protection insurance. I informed him that the only loan I had was my mortgage for which I pay £1.40 a month. He immediately asked me if I had mortgage protection insurance. "On £1.40?" was my reply.

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David Rowse

Jun 30, 2011 at 20:54

There is an enormous gulf between committing an immoral act and stating that you did 'nothing wrong' because you have not broken the law of the land. Surely this has to do with conscience and empathy for others whereby you consider their interests along with your own?

What these people chose to do was morally wrong; they placed their own interests exclusively before those of anyone else, even where they possibly knew that such interest would be detrimental in some circumstances to the welfare of the vulnerable and the needy?

Perhaps many who have been involved in the recent financial debacle, including politicians, might reflect on; 'mia culpa, mia maxima culpa?'

But then perhaps you have to have some moral maturity to admit that you might have been wrong?

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Chris Clark

Jul 01, 2011 at 08:29

There's an excellent chance that a lot of the Lloyds bank layoffs announced yesterday were made up of people who illegally7 designed and sold these policies.

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BritishBankers

Jul 01, 2011 at 09:29

British Bankers' Association here. As our chairman has said, PPI was a product where, in many instances, the banks got things wrong and let customers down. The industry has apologised and is putting things right. We hope that is a clear statement and certainly it was intended to be.

There is no contradiction with what Eric Leenders said. In your clip he was explaining why the banks felt they had to pursue a judicial review - they were concerned it would enshrine the principle of retrospection, whereby the FSA could apply new standards to past sales.

So there are two questions here: whether the banks should apologise for their mistakes over PPI sales (answered by Marcus Agius and Angela Knight - yes); and whether it was right for the banks to have sought a judicial review on the principle of retrospection (answered by Eric Leenders - also yes).

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Ian W

Jul 01, 2011 at 21:19

There is a third question BritishBankers:

3. Why didn't bankers realise that PPI which wouldn't, in almost any circumstance, provide the protection promised was a "mistake" from the outset?

I'll answer it for you if you like? It was only a "mistake" when the game was up and you realised you'd been caught out. Until then it was fair game to rip your customers off so your staff and executives could meet SALES target and qualify for the bonuses! Kerching!! Another customer mugged.

Start giving your customers proper service and stop treating them as a cash cow for the milking.

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Chops

Jul 04, 2011 at 11:35

Couldn't have put it better Ian W.

As David Rowse said a bit earlier, "you have to have some moral maturity to admit that you might have been wrong"..

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