PPI Baby Boomers
Amid all the understandable publicity about the PPI deadline and how it’s fast approaching us, it’s easy to forget that mis-selling PPI isn’t a new issue at all. This financial add-on that brought in so many profits for the lenders but proved to of so little use to the customers has been with us since the 1980s. It’s hard to believe that here in the UK so many different generations of people were persuaded to part with their hard-earned cash for something they generally didn’t need.
Those men and women who bought into the whole PPI thing in the early days are the sort who usually didn’t question what the nice people at the bank or building society were telling them. They were brought up in an era in which most consumers trusted their financial institutions, they relied on the advice they were given and they rarely questioned any of it. In the perhaps more cynical 21st century, we know now that such faith was more than misplaced.
Interest rates were high in the late 1980s and early 1990s, so the banks didn’t have to try too hard to turn over a healthy profit. When those rates started to come down, however, the banks, the building societies and the rest of the industry needed to find rewarding streams of income that helped to keep them in business. PPI served that purpose perfectly, so a boom period based around this flimsy product began in earnest.
A feeding frenzy was under way by this time, with borrowers becoming inundated with offers of loans, mortgages, store cards, credit cards, catalogue accounts and more. The banks couldn’t sell them quickly enough, and when PPI was tacked on to the sale, whether the customer wanted it or not, those profits became even more attractive to those selling the credit.
For the so-called baby boomer generation, there wasn’t really any need to question what the banks were telling them; they trusted these famous high street names, so what could possibly go wrong? Even now, men and women from this era are still less likely to pursue a compensation claim than any others, partly because of this in-built faith in a system that really has let them down.