Banks Incur £557m in Losses

High street banks accused of mis-selling payment protection insurance (PPI) to customers have cost banks an outstanding £557 million as a result of people receiving compensation payments worth anywhere between £200 and £10,000.

Since the scandal was revealed to customers, hundreds of thousands of people have received their compensation payment with payouts averaging £2,750 according to new figures. A total of 532,000 people made a complaint to the Financial Ombudsman Service (FOS) in the first half of the financial year and many are still waiting to receive their money.

The FOS, which has the power to overrule complaints that have been rejected by the banks, has reported that approximately 90% of cases have been upheld in favour of the customers. The FOS has also seen the number of cases it has been involved in rise to more than 3,000 a week in the last two months.

We are glad to see the FOS sympathising with the majority of customers who have been wrongly sold a policy. We think it is important that the onus is placed on the banks for them to comply with the Financial Service Authority rules and process claims within 28 days.

Payment protection insurance is supposed to provide protection for borrowers in the event that they are unable to make repayments towards their credit card, mortgage or other types of loan. However many lenders have been mis-selling these policies by offering them to people that are actually not eligible for coverage. As a result, many borrows are filing complaints and claiming for compensation.

Earlier this year high street banks were told by the Financial Service Authority to speed up compensation payments after they abandoned a court challenge which had stalled claims and were forced to meet a deadline of processing all 200,00 backlog claims before the end of August.

Precision Claims can help you make a PPI claim and help you to recover money owed to you from the banks.