The total amount paid in PPI compensation has broken the £30 billion barrier and the number of PPI claims has rocketed to a four year high.
The Financial Conduct Authority (FCA) has revealed the level of PPI claims has soared by 40% since the Arnie Schwarzenegger adverts urging consumers to ‘Do It Now!’ started bringing the forthcoming PPI claims deadline to public notice.
Complaints about the mis-selling of PPI rose to 1.55 million in the second half of 2017 and the amount of money paid out to successful claimants soared too.
In January 2018 – the latest month figures are available for – banks and other financial firms paid out £415.8 million, up £48.9 million in a single month and the highest monthly total since March 2016.
FCA Executive Director of Strategy and Competition Christopher Woolard said: “Having set a deadline for PPI complaints, we are encouraging consumers to decide whether they want to claim, and if they do, to make their complaint as soon as possible, as many already have.
“We are continuing to monitor and challenge all firms to ensure they maintain the expected standards and are delivering on their commitments to make it easy for people to complain about PPI.
“When PPI is taken out of the mix, the numbers of complaints firms are receiving has remained stable. Firms should be doing all they can to reduce complaints and ensure they are treating customers fairly.”
The Arnie advertising campaign was insisted on by the FCA as a condition of agreeing the banks’ request to put a final deadline on PPI claims. Costing £42 million – paid for by the banking industry – it warns consumers that they must make a claim for any potentially mis-sold PPI before August 29th 2019 or lose the right forever.
When the date was finalised in August last year, successful claimants were paid £271.5 million. Since then the monthly total has risen by millions of pounds more until reaching January’s peak of £415.8 million.
The continuing rise has forced the high street banks to add more to their PPI compensation pot.
Last week CYBG – the former Clydesdale-Yorkshire Bank – added another £350 million and a senior figure at Lloyds Banking Group told the Financial Times that it was “more likely than not” to set aside further money before the 2019 deadline.