Reports from the financial industry are predicting further misery for banks and lenders who are working valiantly in an attempt to close off the stream of cash they’re paying out for mis-selling PPI by lobbying the relevant authorities to impose a claims-by deadline. The scandal has not only led to banks paying back billions they should never have had, but has also affected the banks’ bonus structures and has led to service ring-fencing, which the banks claim is affecting their services.
The banks have so far paid more than £20bn since the mis-selling of PPI was revealed. What is quite stark however, is the fact that about half of this figure is actually interest payments, meaning banks have not paid as much to mis-sold customers as we’re led to believe.
The exact amount of mis-sold PPI policies sold over the last few decades is unclear, but indications suggest it could be close to a massive £50bn.
Banks have estimated that just over 70% of PPI sales were mis-sold, but this is considered to be rather short of the actual figure, so that means there could be another onslaught as the banks may be forced to pay back a further £20bn.
All the banks that were complicit in the mis-selling of PPI have set aside over £30bn and thus far £20bn has actually been paid back. This means that the money that has been set aside won’t be enough to cover more claims.