Studio Retail has become the latest organisation to boost its PPI provision after a surge of claims leading up to the PPI deadline in August.
The firm – best known for its Studio 10 brand – more than doubled its compensation pot overnight.
It had previously paid out more than £7.5 million to successful claimants, but so great was the surge of new claims just before the deadline that it decided to make another £10 million available to pay possible future successes.
A spokesman said the number of claims received had ‘increased very significantly’.
They included ‘a large block’ of claims from the Official Receiver. Those claims refer to potential payments to Britain’s bankrupts.
The receiver’s job is to recover as much money as it can for a bankrupt’s creditors which could include HM Revenue & Customs (HMRC) for overdue taxes.
If the claims are successful any compensation paid will go to the creditors and not the bankrupt.
The spokesman said: “As with other lenders, we are evaluating the validity and quality of these new claims.”
He added that the firm expected to reject ‘a majority’ of them, but still felt it prudent to increase its payment pot by £10 million.
Several other firms have claimed the quality of pre-deadline complaints was very low, but the numbers of last minute claims has been massive.
Most lenders have been reluctant to reveal just how many have been received, but Lloyds Banking Group (LBG) admitted when it added another £1.8 billion to its own provision that in the run up to the deadline it had been receiving around 900,000 PPI information requests (PIRs) a week.
The sums of money involved in what has become Britain’s biggest ever financial scandal are staggering.
The Financial Conduct Authority (FCA) official payout figure has just topped £36.4 billion since January 2011 and this does not include any of the claims made in the immediate run-up to the deadline.
The latest addition was the £432.9 million paid out in July – a jump of almost £100 million on the previous month.
It is expected to take the banks months to give decisions on all the claims they have received.
It normally takes between 8 and 16 weeks for a final decision to be given, but the sheer numbers received will take some time to work through.
No official time has been given, but commentators have been suggesting it could be Spring next year before the final bill is known.