When there has been a tendency to mis-sell a product, often problems later surface for the people who have done the mis-selling. There are many banks in the UK who have mis-sold their products and are now having to face the consequences and offer compensation to their clients and investors.The products notoriously well known have been mis-sold payment protection insurance, and more recently, it has emerged that interest rate swaps were mis-sold to small businesses.
Barclays, one among the most prominent banks in the UK, have been found guilty like many banks of mis-selling financial products. Recently they have allocated the sum of one billion pounds to be able to give just compensation to their clients for mis-selling their products.They have already spent two billion pounds in the past few years in compensation for PPI claims. The billion added to the bill is a 60/40 split to more PPI and the new interest rate swap scandal which has £400 million put aside now.
Amidst the scandal on mis-selling the banks involved including Barclay’s would explain their banking standards during an inquiry in Parliament. Barclays cheif executive position has recently been changed to be given to Antony Jenkins, who will be announcing Barclays yearly performance next week.
The bank’s reputation should be the first thing that they have to uphold. Clients of a certain bank would lose their trust in the Banks that they have entrusted their finances to when in the long run their money couldn’t be well taken care of or has been mis-used. Some of the industries in the UK have already estimated how much money the PPI mis-selling scandal will cost, and it will sum up to almost twelve billion pounds. This amount that is owed back to customers for mis-selling seems to just keep rising, although the banks are keen to put an end deadline in place to try and bring it all to a close.