Jonathan Evans, chair of the All Party Parliamentary Group on Insurance Financial Services, has warned that the final figure for payment protection insurance mis-selling compensation could end up as high as £4bn.
PPI Compensation Claims
Speaking in the opening session of the group’s inquiry into the Financial Services Compensation Scheme, Mr Evans said that “a significant figure is going to become a colossal figure.”
He added that an industry source had told him that the figure in relation to PPI could become as high as £4bn and that most profit has ended up in the banking sector.
When questioned on the figure, Eric Galbraith, chief executive of the British Insurers Brokers Association said that the figure could be in the billions, but that it is “unquantifiable”.
Mr Galbraith added: ‘I want to make it clear – we agree with the concept of compensation. The provision for compensation for customers plays an important part in increasing public confidence in financial services.
“However recent levies on our members – resulting from the failure of certain companies in our FSCS sub class whose main business is not insurance intermediation and who mis- sold PPI – has highlighted the inappropriate structure of the FSCS and is causing members massive concern.
He added: ‘Secondly, there was supposed to be a consultation on the FSCS at the end of last year but this has been delayed. Unfortunately I’m not convinced that the FSA have the desire to really try to resolve this, if or when they consult on the FSCS.
“It is therefore very important that we have this opportunity today to highlight the need for change and for the consultation to commence, as soon as possible, in order to create a more equitable scheme of compensation.”
PPI Claims News
Banks rejecting legitimate PPI Complaints
The recent increase in PPI complaints being recieved by the FOS is a direct results of Banks rejecting increasing numbers of legitimate PPI complaints being sent to them. The FOS has upheld 8 out of 10 PPI complaints forwarded to them.
This 80% of upheld complaints by the FOS highlights how the Banks are increasingly rejecting valid PPI complaints being made by customers.
PPI Complaints still rising for the Financial Ombudsman
A record 86% of all complaints made to the Financial Ombudsman service is about PPI mis-selling. In the first half of the year a reported 266,228 PPI complaints for mis-selling have been lodged.
PPI complaints show no sign of slowing down. We have recently reported that Barclays was recieving an estimated 1,500 PPI complaints per day, The FOS was recieving upwards of 2,000 PPI complaints per day in July
This backs up the theory that only around 1 in 10 people have actually made a PPI claim based on their mis-sold policy. With figures like these, we can expect to see PPI complaints rising for a while longer.
PPI Compensation payments boosting the economy
The Office of National Statistics has released figures suggestiong that the £10 billion in PPI compensation payments that have been made is boosting the economy.
This is nothing new in March we published an article where an analysis by Which? showed that UK consumers paid out £50 billion for PPI protection since 1996. The article also highlighted some other PPI statistics provided by the ONS :
The Financial Ombudsman Service (FOS) has been buried by more than 600,000 complaints about PPI since 2000. Nearly half of those complaints have been filed since July1, 2012. Between that July date and the end of December in 2012, 283,251 complaints have been filed with the ombudsman. That was an increase of 110 percent over the previous six months.
Monthly PPI Claims Payouts for July 2013 is £ 528 m
The Financial Conduct Authority (FCA) released its latest totals on monthly PPI Claim Payouts. July 2013 totals for PPI repayments was £528 million which brings the total of PPI Claims repayments made sine January 2011 to £11.5 billion.
The figures are collected from 26 firms and financial institutions that made up for 96% of all the Payment Protection Insurance complaints from last year.
Tim Capper reports on Financial Mis-Selling for Maple Leaf Financial. Our aim is to ensure you get honest advice and proper guidance to ensure a suitable recommendation can be made to pursue a financial claim
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