Banks have paid customers £38bn ($47bn) for historic mis-selling of payment protection insurance (PPI), Britain’s financial watchdog said on Friday.
The Financial Conduct Authority (FCA) said that UK banks had paid £38bn for PPI mis-selling since 2011, with hundreds of millions paid out each month. It means PPI claims are now “the largest consumer redress exercise in the UK’s history,” according to the FCA’s Jonathan Davidson.
The total payout is also likely to rise, despite last August’s final deadline for PPI claims. About 32.4 million PPI complaints have been made to firms since 2011 but not all have been processed. Banks have set aside £50bn to cover claims.
“Firms are still handling complaints,” said Davidson, who is the executive director of supervision, retail and authorisations at the FCA. “We will continue to monitor firms to ensure that those complaints are handled fairly.”
The FCA said its campaign to get consumers to claim before last year’s deadline had been a success, with 8.9 million complaints submitted in the 14 months leading up to the deadline and 1.4 million claims in the final month alone.
The watchdog mounted a high-profile advertising push, fronted by Terminator actor Arnold Schwarzenegger, to raise awareness of the deadline.
“We set out to bring the issue of PPI to an orderly conclusion and prompt consumers who wanted to complain about PPI to act,” said Davidson. “Our campaign was a success in reaching millions of consumers, many of whom were not previously engaged with the PPI complaints process.”
PPI was a form of insurance intended to help people maintain loan repayments if they fell on hard times. However, the product was aggressively marketed by banks in the 1990s and 2000s to help boost profitability. A 2011 court case ended the practice and opened the door for a wave of compensation claims from consumers.