The great PPI scandal has been raging for more than a decade at the time of writing. Thousands of people have been missold policies by some of the UK’s highest profile banks and financial institutions. Those same individuals who have considered it necessary to make PPI claims may wonder how such a great mess ever came to be.

The problems first began in the mid 1990s, when banks and financial organisations began to offer PPI as a suitable safeguard against the financial impact of illness and injury. It was only upon making a sizeable investment that consumers began to realise that the policies had gaping exclusions and were overpriced. Upon receiving a number of complaints the consumer magazine Which? ran a story addressing the core problems with PPI.

The widely read Which? article confirmed that PPI had been priced at an extortionate level. It also revealed that a vast number of people were not adequately protected by their policies. Attention was drawn to the scandalous tactics employed by some insurance sales people. At this point it would have been impossible to realise the grand scale of the PPI issue.

Some years later and only after thousands more UK residents had become victims of misselling did the FSA run a thorough PPI industry investigation. However, upon conducting a series of mystery shopping visits the high-profile organisation came to the conclusion that masses of consumers had been exploited. Further evidence was provided by the “protection racket” report, issued by the Citizen’s Advice Bureau in 2005. It was clear that the problem wasn’t going to disappear when the Office of Fair Trading were handed a “Super Complaint”.

The seriousness of the PPI issue became ever more apparent as the first decade of the twenty-first century went on. Numerous cases were lodged, resulting in major fines for failure to provide consumers with a clear outline of their insurance options. The Alliance & Leicester were hit with a fine of £7m. Significant demands were also made upon Egg, Capital One and Liverpool Victoria Services. It was hoped that these large sums would go some way towards alleviating the stress and general concern felt by those who had been subject to aggressive and underhand selling.

In 2011 the banks protested against the FSA’s demands to review claims in a fair manner. However, they were forced into compliance following a high court ruling later that year. They continue to pay extremely heavily for failing to abide by the financial regulations.