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http://www.fsa.gov.uk/pubs/final/alliance_leicester.pdf
Ok heres the example - all figures have been pulled from the Link above.
A&L sell 211,000 PPI policies between 14 January 2005 and 31 December 2007.
All of the policies were single premium and the average cost of a policy for a four year term over the Relevant Period was approximately £1,265 (including interest of approximately £210),
Generating a net PPI income for the firm of approximately £135 million.
Fine by FSA was £7 million (30% reduction for early payment) on 6 October 2008.
Lets assume a very generous 50% of people claim refunds, so £67.5 million
Now interest on £135 million, lets say roughly 4%pa to allow for variances (annual compounding only) but in reality its likely to be at least 2% higher.
So we have interest of £1.69 million (rounded)
Income £135,000,000
Interest £1,690,000
Refunds -£67,500,000
Fine -£7,000,000
Net Profit £62,190,000
So despite everything they made £62 million PROFIT from mis-selling a PPI policy, wheres the dis-incentive to not do this again?????
Am i crazy to think this is crazy??
Ok heres the example - all figures have been pulled from the Link above.
A&L sell 211,000 PPI policies between 14 January 2005 and 31 December 2007.
All of the policies were single premium and the average cost of a policy for a four year term over the Relevant Period was approximately £1,265 (including interest of approximately £210),
Generating a net PPI income for the firm of approximately £135 million.
Fine by FSA was £7 million (30% reduction for early payment) on 6 October 2008.
Lets assume a very generous 50% of people claim refunds, so £67.5 million
Now interest on £135 million, lets say roughly 4%pa to allow for variances (annual compounding only) but in reality its likely to be at least 2% higher.
So we have interest of £1.69 million (rounded)
Income £135,000,000
Interest £1,690,000
Refunds -£67,500,000
Fine -£7,000,000
Net Profit £62,190,000
So despite everything they made £62 million PROFIT from mis-selling a PPI policy, wheres the dis-incentive to not do this again?????
Am i crazy to think this is crazy??
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