The total compensation paid for PPI mis-selling has broken the £37 billion barrier.
Latest figures from the Financial Services Authority (FCA) show that £384.6 million was paid in September of last year to take the overall figure to £37.2 billion.
£⅓ billion
The figure represents the first full month after the claims deadline of August 29th and maintains the monthly rate of increase of over £⅓ billion.
No true indication has been given by either the banks or the FCA as to how many claims were submitted in the run-up to the deadline other than the banks admitting they were ‘swamped’.
Overwhelmed
The lenders claimed to be so overwhelmed by the volume of inquiries and complaints that they told the regulator that it could be the summer before the final accounting can be made for the biggest financial scandal Britain has ever seen.
The only other clue about the possible outcome is the fact that within weeks in and around deadline time the high street banks and other firms increased their PPI pots by £4.915 billion in anticipation of what they might have to pay out:
- Lloyds Banking Group (LBG) – £1.8 billion
- Barclays – £1.6 billion
- Royal Bank Of Scotland (RBS) – £900 million
- CYGB (Clydesdale Yorkshire) – £450 million
- Co-op Bank – £75 million
- Nationwide – £50 million
- N Brown (0nline/catalogues) – £30 million
- Studio Retail – £10 million
Annual reports
Perhaps more clues will be given as the banks deliver their annual reports within the next few weeks.
First to do so was Virgin Money – formerly the Clydesdale and Yorkshire Bank Group (CYBG) – who announced it had fallen £139 million into the red after being forced to add £415 million to its PPI pot.
Virgin Money which was taken over by CYBG last September also blamed PPI for ending up £194 million in the red after adding an extra £385 million for PPI.
Alarm bells
When the first alarm bells started to ring about PPI in the early 2000s, the initial estimate was that it would cost the industry between £3 billion and £4 billion and would be quickly cleared up.
More than a decade down the road some experts have suggested the grand total will top £50 billion, but we’ll just have to wait for summer to find out.
Related Story – https://www.gladstonebrookes.co.uk/blog/2020/01/22/ppi-news-a-350-million-ppi-cash-rebate-from-the-taxman/