Very and Littlewoods’ parent company Shop Direct has reported a hit of £100m due to payment protection insurance costs. The retail company has an existing £10.7m loss after announcing its involvement with selling the infamous insurance policy.
Shop Direct recorded a nine-month loss from 31 March 2018 from its total revenues. The collective total including losses from Very and Littlewoods is at £1.51 billion despite Very’s impressive performance during the first quarter.
Home Retail Group is another retail company that entered the PPI fray with Shop Direct in 2014. The Argos chain owner had made a £25m provision for PPI refunds for complaints going back to the year 2,000.
Shop Direct has since used a dedicated team to handle PPI complaints. Their refunds dwarf in comparison to banks given Shop Direct’s PPI just secures bought items on credit. However, the policy providers had failed to check consumers’ backgrounds, which led to the fiasco.
It is likely the “old” system has not been improved, according to experts, because the mis-selling has once again tarnished the profits of Shop Direct and its online retail sites. The FCA can use its probing power to oversee the incentives system of Shop Direct’s insurance department, should it decide to intervene.