Payment Protection Insurance payouts pass £7 billion
Banks and building societies fork out more than £7 billion in compensation to victims of the PPI mis-selling scandal.
New figures from the Financial Services Authority have revealed that more than £7 billion has been paid out in compensation over the past 18 months to people who have been mis-sold payment protection insurance (PPI).
In September alone £516 million was dished out.
The PPI scandal shows no sign of disappearing any time soon. In the first six months of the year it represented 63% of the complaints received by the Financial Ombudsman Service (FOS), with a whopping 85,562 new complaints.
And Lloyds and Barclays have had to put aside an extra £1 billion and £700 million respectively to cover the costs of compensation.
Currently the banking industry’s bill for PPI compensation stands at more than £12 billion, though there have been concerns that some people are attempting to claim compensation despite never having been sold a PPI policy. Read Building societies bombarded with bogus PPI claims for more.
If you still haven’t put in your own claim, be sure to read How to claim your PPI compensation, which explains how easy it is to submit a claim yourself without paying for a claims management firm to do it for you. It’s also worth reading The most successful PPI complaints.
More on PPI
The only PPI worth buying
Building societies bombarded with bogus PPI claims
PPI tops complaints to the Financial Ombudsman
The real result of PPI mis-selling
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I suppose the real damage from this mis-selling fiasco is that all of the rest of use are subsidising the banks' payouts, by menial savings rates or unnecessarily high margins on other financial products, and reduced dividends going into our pension funds. I'm damn sure that the banks aren't defraying these payout costs by cutting back on salaries and bonuses. Joe Public losing out again !
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The sums paid out by our banks are staggering, but probably still much less than they raked in when misselling these products. What I find worrying is how many people think they're clever to have reclaimed their PPI, when if they'd been truly financially savvy they'd never have paid for it in the first place. And I also wonder if the gradual turn around in our GDP figures has something to do with the money being injected in to these consumers hands (probably people who are more likely to go out and spend it than the average consumer). In some respect it has an effect on the economy something like the bank mutualisations of the 80's and 90's.
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Looks like one of the biggest counter scams that this country has ever seen. With everyone jumping on the "I was missold PPI" bandwagon.
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05 December 2012