Arnold Schwarzenegger has emerged as the latest, and most unlikely, beneficiary of the UK's biggest mis-selling scandal, the multibillion-pound payment-protection-insurance debacle.
The Hollywood actor and former governor of California takes the starring role – or at least an animatronic version of his head does – in a new advertising campaign to encourage consumers to claim PPI compensation.
Schwarzenegger appears as a robotic head trundling around a supermarket on top of a mini-tank, urging indecisive shoppers to “make a decision” on PPI claims.
It's not publicly known how much the Terminator star received, but one imagines he took a lucrative slice of the campaign's €46m cost
The ad campaign marks the countdown to the cutoff point for compensation claims, on August 29th, 2019. It’s not publicly known how much the Terminator star received for his part in the frankly bonkers ad, but one imagines he took a lucrative slice of the campaign’s €46 million cost.
Bizarre the ad may be, but it’s memorable at least, and it should be in with a good chance of winning an award for one of the worst of the year.
The campaign, which was launched on Tuesday by the UK Financial Conduct Authority, is being funded by the banks and financial institutions responsible for offloading the costly and useless debt-repayment-insurance policies to the unsuspecting public.
Sixty-four million policies were sold, and an enormous €30 billion has already been paid out in compensation. The big banks have set aside €41 billion, including more than €20 billion by Lloyds Banking Group, which was the most enthusiastic peddler of PPI.
It's already by far the costliest mis-selling scandal perpetrated by the financial-services industry, but it's about to get a whole lot bigger
It’s already by far the costliest mis-selling scandal perpetrated by the financial-services industry, but it’s about to get a whole lot bigger. By some estimates more than half of customers entitled to compensation have yet to make a claim, and the ad campaign is expected to spark a rush of applications.
Many of those who have been turned down for redress in the past will also be allowed to make fresh claims. This follows a case in the UK supreme court, which said that companies selling PPI should have admitted to their clients that they were receiving large commissions.
Having already shelled out so much in compensation, the banks might be expected to carp about having to foot the bill for the campaign. But so relieved are they to have been granted a cut-off point for claims that they have kept quiet, reasoning that at least the nightmare will end in two years’ time.
Or so they hope. One of the many hundreds of claims-management companies that have rushed to take a slice of the PPI-compensation haul has launched a challenge to the deadline, arguing that there should be no time limit.
Managing PPI claims is almost as lucrative a business as selling them in the first place, particularly as it’s relatively simple, and free, for customers to claim themselves.
Claims-management firms have already raked off more than €5 billion of the cash paid out – and if they can’t get an extension of the deadline they certainly intend to make the most of the next two years.
Big-business pay gap
When government proposals for corporate reform are welcomed by two of the leading business-lobby groups, it’s a fair indication that they don’t expect their members to be overly inconvenienced by the “clampdown”.
The package of reforms unveiled on Tuesday by the UK business secretary, Greg Clark, bears very little resemblance to the tough measures floated by Theresa May when she was campaigning to become prime minister.
Big business needed to change, she declared boldly a year ago, promising that workers’ representatives would be given a place in the boardroom and that shareholders’ annual votes on pay would be made legally binding.
Both of those radical moves have now been abandoned, following a backlash not only from big business but also within the Conservative Party, notably from the chancellor, Philip Hammond.
The Confederation of British Industry and the UK Institute of Directors welcomed the watered-down measures, although there was one they're not keen on: the requirement for all listed companies to publish, and justify, the pay ratio between their chief executives and their average UK worker.
Some of those figures will take quite a bit of justification. According to a recent report the biggest pay gap between boss and worker last year was a huge 1,264:1, at the Carnival cruise group, followed by the WPP advertising company, at 1,134:1.
Household-name companies, including Next and Tesco, were also among those with the biggest pay gaps, at 382:1 and 345:1 respectively.
Fiona Walsh is business editor of theguardian.com
