Manpower, an employment group in the UK reported that there were over 20,000 job openings to deal with the number of claims for mis-sold PPI. The giant and well known banks in the United Kingdom have opened its doors to employing more people. The instant boom of the numerous jobs was due to the ongoing issue on PPI mis-selling and the interest rate swaps. Two big banks like Lloyds and Barclays already increased the amount of money to be used for the PPI claims. It was already reported before that the banks have set aside and amount of £17 Billion allocated for the PPI claims.
The Managing Director of Manpower’s UK, Mr. Mark Cahill told BBC during an interview that the said 20,000 jobs exclude the job of the workers to ensure that regulations are met. He also said that not only the banks hired more employees to tackle the issue but also including the Office of the Financial Ombudsman. They have been recruiting more employees. It is also believed by the Manpower that the private sector will have a slow hiring rate compared to the public sector for the coming months.
It was reported that working on the PPI claims would entail a greater task. The Manpower said that thousands will be employed to slowly tackle every customer’s claim from the overdue mis-sold PPI. The said jobs will focus mostly on how to solve and arrange the claims of every affected customers of their own bank. According to Mr. Cahill, most of the jobs that were created were a result of the mis-selling.
The true expanse of the PPI financial scandal committed by banks, financial institutions and other lending companies in the United Kingdom is as immense as the Financial Services Authority tells it to be. Almost every citizen in the country is potentially mis sold at least one to three payment protection insurance policies costing an average of £2750 each. Claims management companies such as www.PPICo.org state that most customers might potentially have two to four PPI with their financing.
The consumer group Which? first made a collective complaint with thousands of customers about the selling methods of financial advisers, who they mentioned to have used generalizations to skip explaining about the insurance policy’s exclusions. The formal complaint was investigated by the Financial Services Authority, who then discovered that virtually all UK borrowers may be mis sold PPI.
Financial advisers often lead customers to believe that the insurance policy is a requirement for the loan application. They also hint to customers that PPI can increase their chances of getting their application approved. Customers are also led to understand that the PPI is a free product because of their high credit scores.
Based on further investigation, PPI was the main source of income for banks and financial institutions during the insurance boom of 2005 to 2007. It was sold in a way that customers will not notice the amounts they repay for the insurance while guaranteeing at least £1 billion in profit for banks.
Today, the total amount of payment protection compensation is now at £12.96 but financial analysts state that it can reach at least £16 billion by the time the PPI crisis has slowed down. The Financial Ombudsman recently reached its 500,000th PPI claim which signifies that the country is halfway to getting back all the repayments they deserve
Dow Jones industrial recently dropped to at least 300 points Wednesday, right after the elections concluded Obama’s victory. Investors and financial analysts raised alarms about the situation, but many others state that it is not a big deal. However, analysts state that it clearly shows signs that the US market is fully volatile and many continue to be so with the new administration.
Stock market experts warn that unless you’re in a losing position, or you’re losing all your investments due to the downfall, you could sell today and use your losses to at least preserve your amount of capital gains. However some analysts state that it can work for the advantage of other investors looking to buy shares from some big name companies directly affected by the fallen stock amount.
The new administration focuses on a bipartisan approach to ensure that the $1 trillion budget deficit is resolved but many find that President Barack Obama might find trouble resolving the “fiscal cliff” deadline scheduled for January 1, 2013. If the issue is not resolved, budget cuts and tax rises can easily take out $600 billion from the economy and can once again send the economies to recession.
The budget cuts and increases in select areas can potentially reduce 2.5 percent of the country’s economic output and might lead to a rise in the unemployment rate due to the layoff that would follow.
Moody’s, the world-renowned credit rating agency, stated that it will not change its opinion about the US credit rating until its evaluation by next year.
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