Latest news

PPI Compensation is Set to Continue for ‘Years to Come’

Posted on: January 16th, 2015 | Author:

Banks will be paying compensation to people mis-sold payment protection insurance (PPI) for years to come, according to the UK’s chief financial ombudsman.

The Financial Ombudsman Service receives 4,000 new PPI cases a week, that is twice as many as all the other areas of complaint put together.

The cost of the scandal is estimated to have reached £24bn, with barely a month going by without a high street bank announcing it is setting aside yet more cash to cover claims.

To combat the deluge of complaints, the FOS plans to recruit 200 extra staff. In recent years, the FOS has taken on over 2,000 new staff to deal with increasing numbers of disputes between financial companies and their customers.

The ombudsman service expects to resolve around 320,000 PPI cases this year, Caroline Wayman, the chief ombudsman, said “it will be years” before anyone can truly say Britain’s biggest ever financial mis-selling scandal is over.

She also went on to say, ‘our plans take into account the increasingly hard-fought and complex nature of the cases we are seeing – not only in PPI but also in areas like mortgages and pensions’.

The Financial Conduct Authority announced that the banking industry had paid out approximately £16billion in three years of the £22billion they had set aside to deal with the consumer scandal.

Over the summer of 2014 the number of cases relating to packaged bank accounts also increased from 50 a week to 500. The Financial Conduct Authority are anticipating receiving 18,000 over the course of 2015/16.

FOS is expecting to receive 150,000 complaints about PPI in 2015/16.