It appears we’re not done yet with big banks making provision for payment protection insurance (PPI) redress. Lloyds Banking Group has announced another £100 million has been added to its PPI compensation reserve, bringing the total provision from the Group to £19.525 billion. £20 billion was at one time predicted to be the final PPI bill for the entire industry, yet Lloyds – which includes Bank of Scotland and TSB – has almost reached this mark single-handedly.
The Financial Conduct Authority (FCA) reports that £34.4 billion has been paid in PPI compensation, as of the end of February 2019.
The FCA’s campaign to alert consumers to the PPI claims deadline has been quiet of late, but the regulator is promising a final burst of publicity this summer.
Although August 29 is the last day on which most PPI claims can be tabled, the long-running saga looks set to rumble on a while longer. The date at the end of August is simply the last day on which a PPI complaint can be made to a firm, then from this time the firm will have eight weeks to investigate the complaint, and the customer will have a further six months after that to decide whether to refer the matter to the Financial Ombudsman Service (FOS).
FCA data reveals that complaints about PPI fell from 1,720,000 in the first half of 2018 to 1,580,000 in the second half – a fall of 8%. However, this fall in part reflects a recent rule change, whereby firms no longer need to include bogus PPI complaints in their data returns – a bogus claim is one where customers (or their claims management companies) allege that the firm mis-sold PPI to them even though no policy existed.
The FCA also says that the proportion of PPI complaints closed within eight weeks rose from 89% between January and June to 97% between July and December. PPI redress in the second half of the year was £1.99 billion, down from £2.31 billion.
The FOS has also recently published data on the complaints received by individual firms. In the second half of 2018, Bank of Scotland customers referred 15,705 PPI complaints to FOS, and the third highest figure for this product was the 11,606 PPI complaints for Lloyds Bank, which is part of the same group as Bank of Scotland. In second place is Financial Insurance Company Limited (FICL) with 13,809 new PPI complaints. FICL was acquired by insurance giant AXA 2018, and the insurer is in dispute with former FICL parent company Genworth over exactly how much of the legacy PPI costs should be borne by the former owner.
Other high street banks seem to have made more progress in resolving PPI issues, as the FOS received less than 2,000 new PPI complaints about Royal Bank of Scotland and NatWest during the six-month period. The figure for Clydesdale Bank was as low as 277.
The overall PPI uphold rate at FOS has fell to 20% for the period July 1 to December 31, however some firms still had high uphold rates, including credit provider NewDay (65%) and lender ShopDirect (63%).
The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article