With just weeks to go before the PPI claims deadline on August 29th, Santander has added another £70 million to its PPI compensation pot.
The announcement came as the bank declared its figures for the second quarter of the year. It is the last chance for them to make an increase before all new PPI claims are time-barred at the end of next month.
In January the bank said in a statement that it had £246 million remaining in its compensation fund, after setting aside £109 million the previous year.
It thought would be enough to see it through to the deadline, but didn’t rule out the possibility of having to add more.
The statement said it was making no additional PPI charges, based on recent claims experience, and having considered the Financial Conduct Authority’s deadline aware ness campaign.
But new claims have continued to flood in as consumers rush to beat the deadline and now Santander is longer sure its provision is adequate.
The figures announcement said: “We made an additional provision of £70m in Q219, reflecting an increase in PPI claims volumes, additional industry activities and having considered guidance provided by the FCA, in advance of the PPI claims deadline.”
It also confirmed the levels of compensation would continue to be monitored and further increased if necessary.
Santander has set aside a total of £1.57 billion for PPI which, while a significant sum, is considerably less than Lloyds Banking Group (LBG) which added £100 million in May, taking their total to a staggering £19.525 billion.
New complaints continue to flood in by the thousand. At the start of the year Lloyds admitted that their original estimate of 11,000 new claims a week had been an underestimate.
The figure was closer to 13,000.
No-one knows how many more new claims will be made before the shutters come down on August 29th, but experts estimate they could still number millions as an estimate 64 million PPI policies have been sold over three decades.
Commenting on what has been called the biggest financial scandal the UK has ever known, Times Banking Editor Katharine Griffiths said: “Even the regulator had no idea of the scale of the problem when it first set its sights on PPI, guessing it could lead to £4.5 billion in claims to settle tens of thousands of cases.
“The matter has been a nightmare for banks, requiring them to try to retrieve information about customers from a pre-internet time, many of whose details have also changed.
But the scale of the problem has been clear to their top bean counters for six or seven years.
“If they had acted quickly either by making ex-gratia payments, or at least communicating clearly and immediately handling cases quickly, they could have saved themselves hundreds of millions of pounds in extra interest to customers they have had to pay down the line.”