In recent years, several financial scandals have shaken the foundations of consumer trust. From mis-sold financial products to fraudulent investment schemes, these incidents have caused widespread harm, often leaving victims with substantial financial losses and stress. Designed to help ordinary people who’ve been taken advantage of, left high and dry by financial institutions, or misled into bad investments, group litigation is helping victims get justice.
If you’re dealing with a financial injustice and wondering “how is this even allowed?”, this no-nonsense guide to ‘financial scandals group litigation’ is for you. We’ll look at what group litigation is, how it holds financial giants accountable, and how you can get involved if you’re ready to fight back.
Notable financial scandals addressed through group litigation
When it comes to high-profile financial scandals, there’s been more than a few.
When you’ve got massive banks or corporations moving billions around and something goes wrong, ordinary people are often left picking up the pieces. And when it comes to taking legal action to right these wrongs, individual voices can get drowned out.
But together? That’s when things start to shift. Here are some standout examples of how group litigation gives people the power to hold the financial giants accountable.
PPI mis-selling claims
The Payment Protection Insurance (PPI) scandal is one of the largest financial scandals in the UK, with millions of people affected. PPI was widely mis-sold to customers who were either ineligible or unlikely to benefit from it, with banks and lenders failing to disclose the terms and limitations of the product. Many people didn’t know they had purchased PPI, as it was often added to loans and credit agreements without explicit consent.
Following regulatory investigations, banks were required to set aside billions of pounds to cover PPI claims, and by 2019, compensation payouts reached over £38 billion. But there’s no end in sight for PPI claims.
While the original deadline to reclaim PPI payments has passed, you can still make a claim in some circumstances. Fresh group litigation claims are underway to help those who were never or under-compensated.
“PPI mis-selling is the UK’s single biggest financial scandal in living memory.”
MoneySavingExpert, Martin Lewis
A new PPI group litigation claim
Harcus Parker, a law firm that specialises in group claims, is hoping to launch a new group action on a no-win, no-fee basis. The firm hopes to recover approximately £18 billion in PPI premiums.
This financial group litigation claim concerns so-called “secret commissions’ charged on PPI sales. In some cases, this commission was as much as 80% of the total PPI cost. Even if you successfully claimed compensation for mis-sold PPI, you could have ANOTHER claim if you unknowingly paid this secret commission.
Post Office ‘Horizon’ claim
In 1999, the UK government began automating accounting processes using Fujitsu’s Horizon computer system at about 14,000 Post Office branches. Sub postmasters began reporting unexplained accounting shortfalls, but the Post Office blamed these discrepancies on the branch operators.
Due to faults in the Horizon IT system, hundreds of sub-postmasters were wrongly accused of theft and fraud. Many were prosecuted, leading to wrongful convictions and severe personal and financial harm. In 2019, group litigation led to a £58 million settlement for 555 sub-postmasters. Group litigation helped to expose Britain’s largest miscarriage of justice and the quashing of hundreds of criminal convictions.
RBS ‘rights issue’ claims
In 2008, the Royal Bank of Scotland (RBS) asked its shareholders for an extra £12bn to raise money in light of a “severe and increasing deterioration” in market conditions. When companies issue extra shares to raise money, this is called a ‘rights issue’.
However, investors claimed that RBS misrepresented its financial position, failing to disclose the extent of its exposure to toxic assets and its financial vulnerability. Shareholders suffered significant financial damages when the bank’s share price plummeted shortly after the rights issue.
Through group litigation, thousands of RBS shareholders pursued compensation for their losses. In 2016, RBS agreed to a multimillion-pound settlement – although the deal was made without RBS admitting liability.
Northern Rock ‘mortgage prisoners’ claims
Around 2,500 borrowers claim they became “mortgage prisoners” after Northern Rock collapsed. They are seeking compensation from Whistletree, a TSB subsidiary that bought the home loans and allegedly inflated their interest rates.
Some claimants took out loans of up to 125% of their property’s value – something which was widely promoted by Northern Rock before the 2008 financial crisis. But as 100% plus mortgages are no longer available, affected homeowners have been unable to switch to new, cheaper deals. Many have paid up to £30,000 more than they would have on a better rate.
There are also ongoing mortgage prisoner claims against MAS5 and The Cooperative Bank.
Irish mortgage mis-selling claims
Mortgage mis-selling during the Celtic Tiger era has affected an estimated 200,000 Irish residents. This scandal happened when banks and other lenders aggressively sold risky mortgages and encouraged struggling families to refinance, combining debts into their mortgages without explaining the long-term risks. After the global crash, thousands were left unable to afford their payments.
At Join the Claim, we’re partnering with leading experts in Irish mortgage mis-selling to help you seek justice, and you can find out more about this claim here.
How group litigation holds financial institutions accountable for financial scandals
Group litigation matters when it comes to financial scandals and standing up to large financial institutions. It’s not just about filing a lawsuit with a bunch of people. It’s about creating strength in numbers, and bringing together people with shared grievances to form a force that’s harder for big companies to ignore.
Strength in numbers
When one person sues a financial giant, it’s easy for the institution to fight back. But when hundreds or thousands of people join forces, the playing field is levelled.
Pooling resources, evidence, and voices is practical and powerful. The collective strength of a group turns up the heat on the institution. It encourages them to settle rather than drag out a potentially pricey and risky court battle.
Access to top-tier legal resources
Group cases tend to attract specialist law firms with the skills, resources, and experience to take on heavyweight financial institutions. These firms often bring in expert witnesses – including forensic accountants, financial analysts, and industry insiders – to build a rock-solid case. For most individuals, hiring this level of representation for financial scandals would be out of reach. But in group litigation everyone gets access to the best legal firepower available – often on a no-win, no-fee basis – giving the case a serious edge.
Putting regulatory pressure on institutions
Group litigation doesn’t just put the spotlight on the institution involved; it can also grab the attention of regulators like the Financial Conduct Authority (FCA). High-profile cases lead to public scrutiny, and that often pushes regulators to dig deeper into the company’s practices. This combination of legal and regulatory pressure forces companies not only to pay up but also to make meaningful changes, like tightening compliance and improving transparency.
The broader impact of group litigation on the financial sector
Beyond securing compensation for individual claimants, high-profile group litigation cases have led to:
- Greater corporate accountability: Facing group legal actions holds companies accountable, making it clear that they can’t overlook consumer rights without consequences.
- Policy changes within financial institutions: When financial institutions are hit with large-scale legal claims, it’s a wake-up call. Facing massive group actions means companies often have to rethink their policies and adopt stronger ethical standards.
- Increased regulatory oversight: Group litigation cases often bring hidden issues to light, leading regulators to step in and increase oversight of financial practices. Increased regulatory scrutiny helps to protect consumers by ensuring that financial institutions adhere to fair and ethical practices – rather than just pay lip service to them.
- Improved consumer protections: The success of group litigation in holding institutions accountable can lead to improved consumer protection laws.
- Enhanced transparency: Litigation over issues like mis-sold products or hidden fees has pushed financial institutions to improve transparency in their offerings. As a result, banks and other companies are more likely to provide clear, upfront information, making it easier for consumers to make informed decisions. This shift is often motivated by the desire to rebuild trust and maintain a positive reputation, ensuring customers feel valued and protected.
Financial scandals group litigation: in conclusion
Financial scandals can devastate individuals and businesses, leaving victims with substantial losses, broken trust, and a real sense of betrayal. Group litigation offers a clear path to justice, giving affected individuals the chance to unite, share resources, and hold powerful financial institutions accountable. By pooling their claims, victims strengthen their voices and push for reforms that have the potential to reshape the financial industry for the better.
However, at a personal level, group litigation is about more than just systemic change; it’s a way to seek accountability and fair compensation for the losses caused by financial misconduct. At Join the Claim, we make this process easy by connecting victims of mass financial wrongdoing with some of the UK’s best law firms.
If you think you’ve been affected by financial mis-selling, visit Join the Claim today to see if you qualify for an ongoing group claim.
