Consumer group Which? notes that UK’s banking industry faced an 18 per cent increase in the number of complaints in the first quarter of 2017, precisely after the FCA’s March announcement of a PPI claims deadline. HSBC, Lloyds, Barclays, Royal Bank of Scotland and Santander are all expected to set aside millions of pounds that would bring the half-decade PPI compensation collective total to £37 billion.
The amount could increase as Cenkos Securities believes the banks have to set aside more for PPI in the next few years due to the August 2019 PPI deadline.
Lloyds has set aside about £350m to cover their additional PPI claims. The remaining banks have yet to state their recompense additions.
PPI is an insurance product designed to protect a loan, mortgage or credit card. Bank employees have used unscrupulous selling methods to have ineligible consumers purchase the insurance policy unnecessarily. The average PPI policy costs about £3000 to £5000 including the PPI compensation of 10 per cent per mis-sold PPI policy.
As Cenko Securities predicts, the number of UK PPI claims could increase in the upcoming years. With more consumers making their own claims, the risk of a clogged PPI claims system is highly likely. It would be wise to make a PPI claim as soon as consumers can.