Statistics released by the FSA indicates that banks and financial institutions have paid compensation worth £5.5 billion to victims of mis-sold PPI policies over a span of 18 months ending in June 2012. Of course, not all claims have been settled and analysts expect this figure to rise to £10 billion before the issue will be fully settled. The intensity of the crisis can be understood from the fact that close to £615 million was paid to victims in the month of June 2012 alone.
The scale of missold PPI policies is increasing drastically as is evident from the additional sums that banks are setting aside towards compensation. Banks and financial institutions were forced to set aside an extra billion pounds towards a settlement of such cases this year. Since the issue of mis-selling of payment protection insurance policies came out in the open, the banks have paid a total of £8 billion towards settlement of the scam.
The total number of complaints received by the Financial Ombudsman Service in the second quarter of 2012 has come down as compared to relevant data of the previous year. However, complaints relating to mis-sold PPI policies continue to remain high. As opposed to credit card and current account transactions that constituted 6% of the total number of complaints, mis-sold PPI complaints constituted 56% of the total complaints received. As opposed to an average success rate of 50%, 69% of complainants received a ruling in their favour as far as mis-sold PPI policies were concerned.
Irate at the fact that Lloyds had to set aside an additional 375 million pounds towards missold PPI policies, its CEO stepped up criticism of claims management companies. According to Antonio, these companies are targeting customers at random and are encouraging them to file claims for missold PPI policies. He claims he too received a marketing call from a company. He has gone on record and stated that only 75% of all claims received are genuine and that the remaining 25% claims are filed by persons who Continue reading