Banks continue to set aside millions for PPI
With less than 100 days to go before the PPI claims deadline on August 29th two high street banks have added £130 million to their PPI provision to make sure they can pay all successful claims.
First to make the announcement was Lloyds Banking Group (LBG) who added £100 million to take their overall compensation figure to £19.525 billion – by far the biggest figure in the UK banking industry.
Half of the total compensation
LBG, which comprises Lloyds, Halifax and Bank Of Scotland, has sold more PPI policies in the last three decades than any other UK financial company and is responsible for almost half of the total £34.9 million compensation paid out by the financial industry since January 2011.
The increase was prompted by larger than expected numbers of new claims being submitted by people trying to beat the PPI deadline. The group budgeted for 11,000 a week but have been receiving in excess of 13,000.
Greater than expected
CYBG – the former Clydesdale-Yorkshire Bank – blamed the need for their increase on greater than expected numbers of new claims too as they added another £30 million to their compensation pot.
Chief financial officer Ian Smith also admitted that the new money may still not be enough to pay the whole PPI bill.
He said: “There is a risk that existing provisions for PPI customer redress may not cover all potential costs. In light of this, the eventual costs of PPI redress and complaint handling may therefore differ materially from that estimated and further provision could be required.”
Approximately £156 million of the £2.67 billion CYBG has set aside remains in the pot to cover the cost of future successful claims and the administration process.
PPI payout now close to £40 billion
New figures released by the Financial Conduct Authority (FCA) show the total payment of PPI compensation is just a shade under £40 billion – 10 times the original estimate in the early years of the scandal.
The total paid out in March was £325.9 million – £26.4 million up on February’s figure.
But the new table also revealed that previously announced totals for every month in the last year have been updated by several million pounds – an overall £198.3 million. No explanation has been given for the change.
Eight years after records began Britain’s financial industry is still paying out an average £360.61 million a month.
Less than 100 days to the deadline
The great PPI claims scandal has entered its final phase with less than 100 days to go before the PPI claims deadline on August 29th.
Tens of thousands of new claims are still being made every week as consumers move to beat the deadline and make sure they don’t miss out on any compensation they may be owed.
Accurate figures of the number of PPI policies sold and the number of successful claims made are difficult to come by because the banks don’t publish them, but the FCA believes around 64 million policies were sold over three decades and there have only been around 15 million successful claims.
Anyone believing they may have been mis-sold a policy in the past must make sure to get their claim in before August 29th or they will lose the right forever and any chance of getting back money they may be owed.
Top 20 payouts
Gladstone Brookes continues to recover life-changing sums of money for our clients with the Top 20 payouts all going to clients who started their claims after the deadline was announced – a total of more than £716,400±!
The top payout of £110,966± went to a gentleman who had successful claims against Barclaycard, Barclays and House Of Fraser and all of the top 20 got back at least £20,000±.
One lady ended up with £39,811± from no less than 13 successful claims against Natwest while a gentleman received £33,803± for 16 successful claims against Lloyds.
Store cards and catalogue accounts also paid out large sums of compensation with one lady getting back £30,116± on her Debenhams card and another receiving £28,475± for successful claims against JD Williams, Very and Littlewoods.
± denotes before fees and taxes
Are you sure you’ve reclaimed ALL your PPI?
Concern has been expressed that consumers could be missing out on millions of pounds because not all of their PPI policies have been investigated.
Consumer champions Which? have revealed that some banks are still only investigating specific accounts named in claims and ignoring anything else, despite the Financial Conduct Authority (FCA) challenging the banks to make the reclaim process easier by checking ALL agreements with customers’ accounts with PPI attached to them.
Full policy history
Spokesman Chiara Cavaglieri said some banks have improved the way they investigate claims, but others ‘don’t check a claimant’s full policy history, unless specifically asked to do so’.
He quoted an example of a 63-year-old lady from County Durham who had made a successful claim for mis-sold PPI on four policies.
But when she asked her bank to make a final check on all of her accounts they admitted PPI had been attached to 13 rollover loans and paid her an additional £12,784 compensation.
When Gladstone Brookes makes a claim for any of our clients we always ask for EVERY account to be checked as clients sometimes forget agreements or believe they don’t have PPI on them because they didn’t ask for it.
Two common forms of mis-selling were unscrupulous sales people adding it to an agreement without their customer’s knowledge and, if it was attached to an initial loan, the lender added it to any top-us without asking permission.
Which? consumer rights editor, Eleanor Snow, added: “It’s disappointing that some banks are continuing to put the burden on customers. Banks should be more proactive about compensating customers who contact them about PPI to ensure they receive the full payout they are entitled to.
“With the deadline to make a PPI claim fast approaching, we would encourage anyone who thinks they might have additional policies to make a general PPI claim, even if they’ve had a payout on one policy already, so they can be sure they’ve received all the compensation they are owed.”