Two big banking scandals have been back in the headlines this week, reminding us how much Big Change is needed in the industry to put customers first, not bankers.
With more than 2.2 million new Payment Protection Insurance (PPI) complaints being made in the first six months of this year alone, PPI is now the biggest financial scandal of all time.
New complaints data from the Financial Services Authority revealed that PPI claims increased by 129% in the first half of 2012, indicating the full extent of the scandal is yet to unfold.
As complaints continue to soar, we're calling on the banks to ensure they set aside more funding to pay back customers who were mis-sold PPI, as the £10 billion they've already set aside could run out within months. Our analysis suggests that if PPI payouts continue at the same pace as the first six months of the year Lloyds could run out of compensation funds by November 2012, Barclays by December 2012, RBS within the next six months, and HSBC by August next year.
The banks must make it as easy as possible for customers to get back what they are rightly owed without any hassle. We also want to see the banks publish monthly updates so there is full transparency about the amounts they have paid back. And they should claw back bonuses from senior executives who presided over the mis-selling scandal.
But the banking scandal doesn't end with PPI. Libor rate-rigging has been back in the headlines after the Financial Services Authority's Martin Wheatley revealed far-reaching reforms to overhaul the Libor system.
Independent governance, effective regulation and criminal sanctions for those who manipulate Libor are a vital step towards restoring the shattered consumer confidence in banking. That's one of the reasons why we're calling for bankers to be punished for mis-selling and bad practice in our Big Change campaign.
The government must take forward Martin Wheatley's recommendations as soon as possible to help fix our broken banking system.
However, this is just the beginning. Fundamental changes are needed to both the practices and culture of the banking industry to protect the public from further mis-selling and scandals. We want banks to put customers before sales and for bankers to meet professional standards and comply with a code of conduct.
You can support our campaign for a return to banks for customers, not bankers and for consumers' best interests to be at the heart of banking reforms by signing the 'Big Change' pledge.
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