Barclays customers who have complained about being mis-sold payment protection insurance (PPI) are set to receive a full refund.
The bank announced today (June 13th) that anyone who complained about being mis-sold PPI before April 20th will receive compensation 'no questions asked'.
This means that consumers who complained to the bank will get their payments plus any interest that they paid on top reimbursed.
However, consumers who did not complain before that date will have to wait at least 16 weeks for a resolution, as the Financial Services Authority has temporarily extended the time set aside for banks to deal with these complaints.
Barclays, Lloyds TSB and RBS have been met with a backlog of complaints following a high court ruling that stated all banks will have to compensate customers who were mis-sold PPI.
PPI is a form of payment protection, which means that consumers applying for loans are often offered the product.
The product is supposed to cover loan repayments if the borrower falls ill or loses their job, meaning they can no longer afford to pay it off.
There are fears that PPI has been sold to some customers who did not understand what it was and may not even be eligible to make a claim under the product.
Peter Vicary-Smith, chief executive of Which?, stated that the best way for banks to clear the PPI backlog is to pay up.
He said: "The quickest way for these banks to clear the backlog is by paying up, so we're pleased that Barclays has chosen to settle all complaints that it put on hold while this went to court.
"It's now up to the other big banks to follow suit and quickly reimburse customers who are entitled to compensation."
Lloyds TSB announced on May 5th that it would not be pursuing an appeal into the high court's decision regarding PPI.
In 2005, there were a total of 20 million PPI policies in force, generating annual revenue of over £5 billion.