January 15th, 2013
STEVE HAWKES, Business Editor. “Bank bill for PPI scandal soars to £10bn”, Published: 19th October 2012
The bank bill for the PPI mis-selling scandal has soared to an eye-watering £10BILLION.
BARCLAYS last night said it needed to set aside another £700million to compensate customers for mis-selling Payment Protection Insurance.
That takes its total provision to £2billion and the bill for the whole banking industry to more than £10billion.
LLOYDS faces a £4.3billion bill and ROYAL BANK OF SCOTLAND £1.4billion.
Barclays said: “We have experienced higher than previously anticipated claim volumes.”
Insiders said they had been stunned by the surge in claims since July as “ambulance chasers” drum up business.
One source claimed that almost half were from claims management companies representing customers who had never even had a PPI policy with the bank.
But experts insist many claims are from real customers finally realising they may be able to get some money back off their bank.
Ralph Silva, banking analyst at SRN, said: “The banks brought this on themselves, they should never have pushed these policies onto customers in the first place.
“They have screwed up twice, in the first place by doing the wrong thing, then secondly by not assessing the cost of doing the wrong thing accurately.”
PPI was sold as an insurance policy to cover customer repayments if they lost their jobs or became ill. But many would never have been able to claim.
The Financial Ombudsman Service said the volume of PPI complaints doubled between January and June — and 1,500 new cases were arriving every day.
Lloyds retail chief Alison Brittain admitted to the Sun last month that hardly any of the bank’s branch staff took out PPI cover themselves.