Is there anything banks havn't missold?

ChopperST

I'm sure there was a poster not too long back that successfully reclaimed for "mis-selling" of her PPI on her loan. She was made redundant a month or two later and returned to ask if she could claim on the policy! :rotfl:

Milarky

My discomfort about the concept of 'mis-selling' is that it conveniently bypasses what happens to all the [STRIKE]collars[/STRIKE] customers that remain behind after the 'mis-selling' claims have been settled.

I had an endowment. It was not 'missold'. But as a collective form of investment (something that is not made clear as part of the regulated selling process) it was subject to the predations of 'bonusing'. Another term for bonusing (or 'with-profits') has since come to these shores from history - a Ponzi. That's right, an authorised product whether 'mis-sold' or not can still be a Ponzi.

Think of it like this:

a) You regularly make investments into a collective fund. These buy units with your name on and are put in a box separate from all the other investors' boxes. The value of your units may rise or fall. You acknowledge the risk inherent in this form of investment and everyone is happy to continue.

b) Your 'with-profits' provider makes identical investments with the same amount money which you regularly give them in an identical market-based fund. These the same number of units in their name and are now put in one big box containing all the other little peoples accounts with them. The value of these units will rise or fall in exactly the same way. But now you are deemed to 'hold' more or fewer - but always a different number - of these (varying) units in your so-called with-profits 'account' than you would actually have been able to go out and purchase directly for yourself, depending on complex 'bonusing' rules which neither you, nor anyone, else seems to fully understand or can explain. (These 'rules' fall outside the regulated selling process of course)

Long story short: with-profits used to be marketed on the basis of taking risk out of the stock market. It could only appear to do this, though, through an accounting gimmick nowadays recognisably Ponzi in nature - by not maintaining separation of client monies - by 'bonusing' those leaving the scheme - presumably in order to raise the seeming attractiveness of this method over direct investment returns - a la Bernie Madoff - thus suckering in more customers necessary to keep the bandwagon on the road.

[And where does the money to compensate for settling established 'mis-selling' come from if not from the same diminishing pool of collective saving?]

Gentoo365

It could be argued that the following have also been missold

People being sold electrical goods they don't need
People being sold mobile phones and plans they don't need
People being sold insurance policies they don't need
People being sold 2-for-1 offers in supermarkets they don't need
People being sold houses (or rental agreements) based on persuasion
People being sold holidays and addons to holidays they don't need
People being sold diets they will not complete

...and many other things.

If you think of all the shops you have been into, and all the times you have tried to buy something you will have had situations were sales people, or sales literature which promotes the product.

The problem was when this culture of 'sales' entered banking. Which is undoubtedly a bad thing, and one I believe that is slowly improving. However you cannot expect a bank to be liable for bad financial decisions of a customer.

We do risk swinging too far. Imagine if you could take you TV back a year or two later and complain that the sales person did not ask you whether or not you watch enough TV to justify that size of a screen. Imagine if you sold something on eBay, and the buyer managed to get a refund because you did not inform him of the serial number in writing within the 14 day period.

This is what it is coming to in banking. People just claiming misselling because they can, because they see it as a way of beating the system.

While some seem to be justified (PPI, Card Protection) there are some compensation situations that just seem odd. Like those santander loans where the company forgot to add some technicality about legislation on a letter, or the Northern Rock mortgages where the company did not remind people of the amount they lent in the statements.

These are situations where the company ends up paying out on a technicality that has not in any way disadvantaged the customer.

You would rarely see that in any other industry. So I think it is important in banking and financial services that the punitive compensation is controlled somewhat. To ensure that customers that have actually been disadvantaged are put right, but to stop a situation where people are just 'lucky' and get compensation because of an admin error that made no difference to them whatsoever.

Gentoo365

redbuzzard wrote: »

they are doing it retrospectively which is having some very perverse effects.

One of the effects is that the media (and many internet forums/comments) often portray it as 'yet another scandal!' or 'they still have not yet learnt their lesson!' with the implication that nothing has changed and that it is continuing.

Goldiegirl

Most of the people putting in these claims have no idea what they are claiming about.

They try and think of every financial transaction they've had in the last 25 years, don't really know if they ever had PPI, but decide to try and 'reclaim' it anyway.

What they don't seem to understand is they need to have a reason why the insurance was mis-sold, and most of the time they can't think up a reason, which isn't really surprising if they don't know if they had it in the first place.

Genuine mis-selling of financial products was a scandal........ But this 'reclaiming' culture is very distasteful, in my opinion.

yangptangkipperbang

I'm surprised that the banks haven't started selling insurance against getting mis-sold insurance................or have they ??

cepheus

bigfreddiel wrote: »

.....and is there any other industry that has missold as many products as banks

or insurance

or.....

fj

You won't get much joy out of a forum taken over by a bunch of corporate apologists. I have little doubt many of them have been beneficiaries. It's a sorry excuse for a consumer board.

The Financial industry has a moral status on par with prostitution and illegal drug dealing. In fact these industries could well overlap since the latter was one of the most lucrative areas for the City.

atush

bigfreddiel wrote: »

.....and is there any other industry that has missold as many products as banks

or insurance

or.....

fj

Unusual for you to add a caveat, I was going to say insurance.

But there are others. House builders, estate agents, travel agents, plastic surgeons, the list is endless.

What about the GOOD things banks sold us? Whe we bought our LT tracker for base plus .49% we thought it was a good idea potentially, Turned out, was the best idea EVER.

atush

cepheus wrote: »

The Financial industry has a moral status on par with prostitution and illegal drug dealing. In fact these industries could well overlap since the latter was one of the most lucrative areas for the City.

Please, what a load of twaddle.

The financial industry is regulated. It pays taxes, it collects taxes.

More importantly, if things go wrong you can get recompence. Try getting that off your dealer if you don't get high enough, or die of an OD or contaminents. Or just dont get off in the other case.

gadgetmind

cepheus wrote: »

It's a sorry excuse for a consumer board.

If you can't handle balance then go elsewhere.

The Financial industry has a moral status on par with prostitution and illegal drug dealing. In fact these industries could well overlap since the latter was one of the most lucrative areas for the City.

Such clumsy attacks do little to advance the discussion, but TBH this thread wasn't exactly designed to be productive and balanced.