Extra staff hired in addition to costs of PPI compensation
by Russell Shackleford, 23rd June 2011
The high street banks are facing billions of pounds in costs
after the judicial review over the mis-sold PPI scandal was decided
against them.
PPI, or Payment Protection Insurance, was determined to have
been sold to millions of borrowers alongside loans, even when they
did not need it, did not ask for it or in some cases were not in a
situation to ever be able to claim on it. While some customers
found their PPI policies useful, a vast percentage of those with
PPI policies were found to have had them wrongly sold by their
banks.
Industry regulators put pressure on the banks to compensate
clients who had policies mis-sold to them, and the outcome of the
judicial review confirmed that the responsibility fell to the banks
to ensure that payouts were given to wronged consumers. The result
is that the banks are now facing vast costs in order to meet their
legal responsibilities.
In addition to the billions of pounds that lending institutions
are expected to pay out to customers who were inappropriately sold
PPI policies, the banks are also facing additional costs in hiring
on new workers in order to process the vast backlog of claims.
The Financial Services Authority has granted banks an extension
on the usual deadline of dealing with complaints - any complaints
regarding mis-sold PPI received before the 20th of April
must receive replies before the end of August - but they must still
sort through these and establish the veracity of each claim, which
has led to a need for additional employees to assist in this
gargantuan task.
Such is the scale of the undertaking, Barclays this week
announced that they would not be dealing with mis-sold PPI
complaints in the ordinary manner, but would instead pay out by
default to anyone who had lodged a PPI complaint before or during
the judicial review. The other banks have not followed Barclays'
lead, however, and could face mounting costs and a vast deal of
work as a result.
If you have a mis-sold PPI complaint, we can help you claim back
PPI.
Claims
Financial
Testimonial
"I just had to put pen to paper and write to say I'm more than delighted with my settlement that you won me back from my PPI I had with Lloyds TSB. The Claim Forms were simple to fill in. It was a breeze"
Mr R Evans 11 Nov 2010