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The PPI claims scandal has cost the banks billions of pounds in the last few years and this figure hasn’t stopped rising, it is expected that it will soon be crossing the landmark £10 billion point. There appears to be a love/hate relationship across the United Kingdom when it comes to the payment protection insurance scandal and the claims and refunds which have happened as a result of the scandal and to see this in full you need to look at the PPI scandal from a variety of perspectives such as from the view of the economy as a whole, the banks and the claimants.

The claimants who became victims of this scandal now have the opportunity to get a refund on their policy and all of the money that was spent is getting repaid to them as well as a statutory 8% in order to compensate the consumer for the trouble the payment protection insurance scandal has caused them. However, regardless of the fact the claimant is now receiving their money back this is not automatic and a claim still needs to be made before this happens. In addition to this the PPI scandal has generally created a large dent in the amount of trust the consumers have in regards to the banks, their sales procedures and the amount of faith they have in the payment protection insurance products which exist on the market today. Many consumers believe that if it was so easy for the banks to show little regard for their duty of care towards the consumer so commonly in the past in return for high commissions and sales figures it is as a result easy for them to continue to do this in the future with new products and sales techniques. On the other hand, despite the negative perception of the banks that has been created due to the scandal the repayments and compensation have proved to be welcomed by all recipients and given the claimants an unprecedented cash flow boost which has countless benefits to be considered.

The banks and financial institutions attempted to fight against the court rulings in regards to their mis-selling of the payment protection insurance policies until May 2011 when it was announced by The British Bankers Association that they would no longer be appealing against the decisions made in a High Court ruling regarding the sales process of PPI and the rules that have been imposed. As a result of the scandal the banks have seen billions of pounds of their profits being channelled into the repayments and drops in predicted profits or losses suffered by the banks have been attributed to the unexpected massive cost of the PPI claims. At the beginning of the scandal the banks all put aside relatively small sums in order to cover the cost of the repayments however since then there has been constant increases in these figures. This, as well as the cost of creating new departments and handling the claims processes for thousands of claims being made has resulted in profit drops for banks and potential shareholder unease with share prices seeing massive drops over the last few months.

Uniform Tax Refund and Claiming Procedure

The PPI scandal from the perspective of the economy has a whole needs to balance the two views from the claimants and the banks. The £10 billion which the scandal has cost the banks has of course been pumped into the economy at a rapid rate and there have been many reports of the pay outs being spent in industries such as travel and construction which had both been damaged by the recession. In addition to the large spending power being given to many consumers those whose PPI policies were on active loans and credit cards will have had the pay out contribute to or completely pay off their balance. As a result this would lead to a potential increase in the credit rating of such consumers resulting in said consumers being able to access better deals on future loans and credit cards. Alongside this consumers having their loan balance paid off will of course result in the lowering of monthly outgoings, creating more disposable income on a long term basis. According to HMRC Tax Rebate on Uniform experts  says that these rebates or more commonly known as  the most affected are the ones living close to the bread line, and really could have done without these unnecessary payments, this view is shared by similar experts in the field of HMRC Uniform Tax Refund .  FAST Expert economists have likened the PPI pay outs which have been made to a massive income tax cut being made with similar effects reported as well as an all-round boost to the economy. The PPI claims industry which has been created due to the scandal has been responsible for the creation of hundreds of jobs both in the banks and with claims management companies such as PPI Claims Management and increased availability of jobs will once again result in a boost to the overall economy.