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Monday, 2 June 2014

PPI - No, really

Do banks get prizes for giving away PPI compensation? 

Now I've never had PPI on loans or credit cards - I've always known it was a complete scam and always rejected it. And I'm not into loans or paying interest much anyway - certainly not since I grew up. But clearing out some old boxes of papers - research for a biography of the last Emir of Bokhara that I'll never write, some A-grade Master's degree essays and the like - I came across the faded handwritten carbons of a loan agreement with my bank from 1988, for not a very large sum. And guess what? It included PPI. Certainly the last and only time I'd ever had it. Well, Limitation Act and all that - simple contracts only actionable for six years etc. - I almost chucked them on the shredding pile, but some mischievous perversity tempted me to put a claim in.

That was ten days ago. I've just had a letter upholding my claim and paying out £2,800 - most of it simple interest at 8% a year from 1988. And what's more, the tone of the thing is proud and happy, as though they're delighted to be able to give the bank's money away so easily. 



visc said...

Congratulations, like you I never knowingly had PPI. If only I had taken 10 out ...

James Higham said...

Had similar with a pension I'd even forgotten about. Seems there was a tidy sum in there.

Johnm said...

The banks have no money.
The compensation they're giving will be recouped by increasing charges and levying new charges.
Bear in mind that every pound they lend is backed by a few pence in deposits. The banks have been technically bankrupt since they started.

Alice down the Rabbit hole said...

JohnM - that's the nature offractional reserve banking no? "Money in the bank" is no such thinsg you are merely a creditor to an extremely highly leveraged entity. Oh and while wh're on the subject the money creation cycle in th text books is wrong, they create money outof thing air BEFORE pretending to worry about deposits. Under the basic tenets of contract law it is fraud, (they bring no consideration to any contract with you, by creating the money from nothing.) Think on it.

Anonymous said...

Ohhhh...... where's my tinfoil hat?

AndrewZ said...

Were you being serious about writing a biography of the last Emir of Bokhara? If so, what got you onto such an obscure subject and is there any evidence that he was ever mis-sold a PPI agreement on a loan or credit card?

Raedwald said...

AndrewZ - Like many things, it was chance. Whilst searching for something else in the PRO at Kew I came across a fond recording British Intelligence activities in and around Persia - including the wonderful first hand accounts of the last Emir's flight from Bokhara with the Bolsheviks chasing him. He was a pederast, and as he fled he abandoned goods, riches, household and family on the way - keeping hold only of his young men. He was really quite a rascal and as I read the aged documents, I grew rather fond of him - a pre-requisite for a biographer.

Alice down the Rabbit hole said...

never heard of the Emir before he seems another of those faded characters of history all but forgotten. The flavour of the description reminds me of the decdence and decay of the Young Turks in Constantinople a few years earlier and a little to the west.

Very droll Anon, don't worry which ever material you choose for your hat it won't change any of the facts. Have a look at the the last BoE quarterly bulletin regarding money creation.