LONDON, Feb 22 (Reuters) - British lenders paid out a record 441 million pounds in compensation for insurance mis-selling in December, taking total payouts for 2011 to 1.9 billion pounds ($3 billion) and raising the prospect of an even bigger bill this year.
Britain's financial regulator said payouts in December topped the previous record of 379 million in November (Stuttgart: A0Z24E - news) . Aside from September, there has been an increase in monthly payouts every month since April, when banks lost a court case to end a long-running legal battle.
Banks may have to pay more than 6 billion pounds to compensate millions of customers who were wrongly sold loan insurance. Payment protection insurance (PPI) policies were typically taken out alongside a personal loan or mortgage to cover repayments if customers fell ill or lost jobs, but they were often sold to self-employed or unemployed people who would not have been able to claim.
Lloyds Banking Group (LSE: LLOY.L - news) has set aside 3.2 billion pounds to compensate customers, and this week the bank said it would claw back past bonus payments to bosses who were in charge at the time of the mis-selling.
Other major UK banks such as Barclays (LSE: BARC.L - news) and Royal Bank of Scotland and some international banks and other lenders have also set aside money for big payouts. ($1 = 0.6321 British pounds) (Reporting by Steve Slater; Editing by Hans-Juergen Peters)
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