PPI compensation hits monthly record

Compensation to financial customers who were mis-sold payment protection insurance reached more than £350 million in November last year ñ a monthly record.

Figures released by the Financial Services Authority (FSA) show that £379 million was paid in compensation to customers in November ñ the highest total of any month.

This is an increase of more than £100 million from the previous month, when banks and lenders paid out £268 million in compensation.

The compensation payout in October had been a record in itself, while September had seen compensation payouts total £222 million.

The figures for November 2011 were supplied to the FSA by 16 unnamed financial firms, which collectively had a 92% share of all PPI complaints in the first half 2011.

The record-breaking month has brought the total amount of compensation paid to customers to more than £1 billion since the scandal began.

In contrast to the high sums paid out in the latter stages of last year, compensation for the first six months of 2011 was just £215 million in total.

This is because of a legal challenge by the British Bankersí Association, which was rejected by the High Court in April.

The High Court decided that the rules relating to the mis-selling of PPI could be applied retrospectively, meaning that more than three million people could apply for compensation.

This has led to the banks and financial lendersí compensation bill reaching more than £1 billion. And this is expected to rise sharply in 2012, as customer complaints continue to increase.

The Financial Ombudsman Service (FOS) recently revealed that it had received 55,907 complaints in the final quarter of 2012 ñ up 10% from the previous three months.

PPI is a policy designed to take on outstanding repayments in the event of a loss of income, from redundancy or illness, but it was mis-sold to people who did not want it or need it.

But it can be a useful policy in some cases, and you can compare payment protection insurance with Money Expert.

Leave a Reply

Your email address will not be published. Required fields are marked *