Free Business Dissertations - (selectloans.co.uk, 2005) The Bbc One Program Offered An Example Where A
(SelectLoans.co.uk, 2005) The BBC One program offered an example where a couple, Julie and Kevin Davies were extended a loan of £20,000 by our bank to consolidate £4,000 in debts. A considerable portion of said loan covered interest and the cost of loan insurance that was to protect the loan in the instance if the couple became unemployed. The damaging aspect of the story is that the Davis’ did not have jobs at the time the loan was approved. (BBC.co.uk, 2004) The story went on to illustrate the story of a blind man who was also encouraged to take out loans weighed down with payment protection insurance and interest that comprised almost one-fifth of his final loan in spite of the fact that the individual was unemployed (BBC.co.uk, 2004). These types of glaring irregularities do nothing to aid the image of the institution even in the face of the bank refunding £22,000 to the Davis couple and £6,000 to the blind man as a result (BBC.co.uk, 2004).
The foregoing, as well as the aspects outlined in the following summary analysis segments points to the need to consider the bank’s approach with respect to a area, Payment Protection Insurance, that has drawn considerable public coverage and particularly targets Lloyds as an offender.
Is the institution flirting with regulatory as well as legal issues that could damage and or impact the banks reputation and public image?
The response to this question is affirmative! A recent inquiry concluded by the Financial Services Authority on the Sale of Payment Protection Insurance which has been distributed to all banking institutions indicated that a survey conducted among 45 banks uncovered questionable selling practices and/or lack of proper compliance controls. (FSA, 2005). The preceding survey utilized mystery shoppers and the report went on to state the following as a result of this survey:
Action the FSA Will Take
The Report was prepared to alert all banking institutions to compliance issues and urges that such aspects be addressed prior to the next survey whereby enforcement action might be utilized where a continuance of issues is found to exist.
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