Worst Banking Scandals Plaguing UK Today

Worst Banking Scandals Plaguing UK Today

Posted by Rachel S. with 0 Comments

Image source: ThePioneerWoman.com

Bankers want us to believe they’re reforming and doing better, but until they clean up the messes they’ve created, how can trust be rebuilt? Collectively, our banks have done billions of pounds of damage to us as consumers, tosmall and mid-sized businesses critical to our economic recovery and to the world at large. The Independent Commission on Banking has promised reforms, but if the banks aren’t committed to real change, nothing will get better.
And if our banks really want to restore our trust in them, they won’t try to move forward without tending to the festering wounds of these five very active banking scandals:

Image source: Guardian.co.uk

#1 PPI Scandal
Lloyds’ retail chief Alison Brittain has been quick to call PPI mis-selling a “legacy issue” that’s part of Lloyd’s past. She told Daily Mail, “We don’t sell PPI any more and so it is not about what is happening now.” With only half of the £10bn PPI provision paid out and complaints about PPI claims bungling to FSA and FOS sky-rocketing, it’s clearly a part of the bank’s present and future. Consumer advocate Which? thinks the £10bn pot is inadequate and banks have greatly underestimated the amount of redress that will be due.

Image source: Scoop.it

#2 Libor Rate Rigging Scandal
Banks and their rogue traders rigged the key Libor interest rate to seem more stable and to benefit certain investments. While the damage in the UK may not be financially extensive, it’s a huge blow to our position in the world market as a trusted financial centre which will impact our economy and us as a result. Barclays has already paid £290m in fines to the yanks and more banks will follow. This is good for no one.

Image source: Buzz.Money.CNN.com

#3 Rate Swap Mis-Selling Scandal
With our economy in crisis, the plague of mis-selling complex and unnecessarily costly hedging products alongside business loans has hampered our recovery, cost us jobs and contributed to the financial malaise engulfing the UK. Banks mis-sold this product to small and mid-sized business owners knowing the damage it could cause and are now stinting on redress efforts that could rebuild our economy and create jobs. The impact of this scandal will be in the hundreds of millions of pounds, but the impact on people lives – people who lost their livelihoods – is both terrible and incalculable.

Image source: Liberapedia.wikia.com

#4 Money Laundering Scandal
It may seem like no big deal that Standard Chartered and HSBC were laundering money for groups the US has sanctioned – such as drug dealers, rogue nations and terror groups, but it’s huge.

Image source: FreeDebtAdvice-uk.com

#5 Interest Only Mortgages Scandal
This scandal is brewing and about to hit and will complete the Pentateuch of UK banking scandals of the last decade. Recently installed Barclays’ chief Antony Jenkins predicted interest only mortgages will be the next big banking scandal. Borrowers were allowed (even encouraged) to buy homes with mortgages that offered them no hope of equity and balloon payments they were little likely to manage. As with all of these scandals, no one but the banks will profit.