By Hannah Supree
PPI is something that just won't go away at the moment. Banks gave up fighting the action for compensation last year, and in light of that they probably want to get the process of handling claims over with as quickly as customers do. The FSA has threatened fines if banks don't do more to inform customers about claiming on PPIs, but how much exactly has been returned to victims of the scandal so far?
Actually the amount that's been paid back is in excess of two billion pounds, and most of that was given out in 2011 alone. This seems to have been due to the fact that banks stopped resisting the compensation in court, and instead started trying to avoid FSA fines. The thing is, two billion is well bellow the amount that's probably due to customers involved in this mis-selling. The FSA and Which? magazine put the total figure at somewhere around eight billion pounds, so that leaves a lot to give out. With new measures in place to inform the public, it's expected that four billion pounds will be paid this year. That doesn't mean that banks will collapse - the losses they reported this year are based on setting aside the total amount of compensation they expect to pay out, so that money's already gone as far as they're concerned.
Frustratingly this doesn't mean that two billion pounds has been put into the hands of customers. As much as 25% of that may have been lost to claims company fees. The FSA says that the majority of claims are still coming in this way, despite the fact that people can get free representation from ombudsmen. It seems that claims companies have been cold calling people about PPI, and are still finding ways of getting the word out more effectively than the banks and the government put together.
The banks actually made around seventeen billion pounds on PPI. The discrepancy in claims paid out to total profits is because not all PPI was mis-sold. For some people it actually helped them get through difficult times. But in around one third of the cases the policy was given under false pretences.
Right now it's just a question of how long the process will take. It seems that at this rate it could easily drag on for another year or so.
Actually the amount that's been paid back is in excess of two billion pounds, and most of that was given out in 2011 alone. This seems to have been due to the fact that banks stopped resisting the compensation in court, and instead started trying to avoid FSA fines. The thing is, two billion is well bellow the amount that's probably due to customers involved in this mis-selling. The FSA and Which? magazine put the total figure at somewhere around eight billion pounds, so that leaves a lot to give out. With new measures in place to inform the public, it's expected that four billion pounds will be paid this year. That doesn't mean that banks will collapse - the losses they reported this year are based on setting aside the total amount of compensation they expect to pay out, so that money's already gone as far as they're concerned.
Frustratingly this doesn't mean that two billion pounds has been put into the hands of customers. As much as 25% of that may have been lost to claims company fees. The FSA says that the majority of claims are still coming in this way, despite the fact that people can get free representation from ombudsmen. It seems that claims companies have been cold calling people about PPI, and are still finding ways of getting the word out more effectively than the banks and the government put together.
The banks actually made around seventeen billion pounds on PPI. The discrepancy in claims paid out to total profits is because not all PPI was mis-sold. For some people it actually helped them get through difficult times. But in around one third of the cases the policy was given under false pretences.
Right now it's just a question of how long the process will take. It seems that at this rate it could easily drag on for another year or so.
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