The Financial Conduct Authority (“FCA“) has announced the final deadline of 29th August 2019 in an attempt to draw a line under claims of PPI mis-selling, claims that have plagued lenders over the last decade. PPI has turned out to be one of the most expensive issues ever to have hit the UK’s financial sector. Based on FCA figures, since January 2011, a total of £27 billion has been paid out to customers.
Barclays has set aside an extra £700m for the payment protection insurance mis-selling scandal.
The additional provision for PPI mis-selling takes Barclays’ total bill to £9.1bn and follows the move by Lloyds Banking Group on Thursday to increase its PPI provisions, taking its total to £18.1bn.
Lloyds Banking Group has taken a fresh £1.6bn hit in the first six months of the year to cope with a new wave of claims from consumers missold payment protection insurance and to rectify treatment of mistreated mortgage customers.
The figure includes an additional £1bn charge for PPI – a scandal that has now cost the bank £18.1bn since it first started taking provisions in 2011.
Banks stand to pocket up to £23bn in unpaid payment protection insurance (PPI) compensation when new deadlines come in, a new campaign group has warned.
The group Payback Time was launched today to warn how new proposals to be announced in early 2017 are expected to limit what companies can do to expose the PPI scandal.
Under the new plans, the government and regulators intend to encourage banks to spend £42m on publicising the costliest financial scandal ever to hit the UK’s banks, which is just a small portion of the £23bn the banks hold in PPI redress funds.
Claims management companies on the other hand have invested £200m publicising the PPI scandal. Currently 80 per cent of successful claims are being made through these companies.
The financial ombudsman expects to handle record numbers of payment protection insurance complaints next year as the fallout from the mis-selling scandal continues.
In its proposed plans and budget for 2017-18, the Financial Ombudsman Service (FOS) anticipates it will resolve 360,000 PPI complaints during that year and it proposes to resource its operations based on these expected levels.
The FOS, which clears up disputes between consumers and financial firms, said it expects to have resolved 170,000 PPI complaints across the financial year 2016-17.
The service has received 1.6 million complaints about PPI in total – and it still gets around 3,000 new complaints a week.
The FOS said it believes the number of complaints it receives in the next financial year will be “heavily influenced” by a proposed deadline for PPI complaints.
The Financial Conduct Authority (FCA) has previously proposed that a deadline of June 2019 could be set for PPI claims and it is due to make a further announcement about this in the first quarter of 2017 after considering feedback.
Banks might have to pay out more in compensation to victims of the £40bn payment protection insurance scandal after the financial regulator delayed a decision on setting a deadline for complaints.
The Financial Conduct Authority said in August it was considering a spring 2019 cutoff and would decide before the end of 2016. The proposed deadline was more than a year later than the industry had expected, raising the prospect of more claims being allowed.
This decision now looks like it will be delayed until mid 2017.
The total provision set aside by MBNA for mis-sold Payment Protection Insurance complaints reaches £240m.
Lloyds is to buy credit card firm MBNA from Bank of America for £1.9bn, giving them a 26% share of the UK credit card market.
The MBNA deal is the first acquisition for Lloyds since the banking giant took on collapsed bank HBOS in September 2008 in the midst of the financial crisis.
However, that deal ultimately led to the government stepping in to bail out Lloyds, and it ended up with a 43% stake.
Industry experts question, why that after previous failings, Lloyd are able to buy one the largest credit card companies in the UK.
Thousands of divorced women deprived of PPI payouts by NatWest and Royal Bank of Scotland will receive compensation, Money Mail can reveal.
State-backed RBS-NatWest failed to pay separated and divorced women their legal share of payouts for mis-sold payment protection insurance (PPI).
In an email, the bank, which is 73 per cent owned by the taxpayer, admits it was in the wrong and has changed its policy.
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It has been calculated by the think tank New City Agenda that just over £40bn has now been set aside by banks to pay compensation to customers who were mis-sold the insurance polices in the first place, and to employ thousands of extra staff to process the subsequent complaints. Call today to begin your FREE* check.