Customers who complained about the mis-selling of Personal Protection Insurance have thus far received more than 200 million pounds in compensation during the first half of the year.
The 16 companies that were responsible for 9 out of 10 PPI complaints have been footing the enormous bill. The banking industry, which brought up a legal challenge against the FSA and lost, paid 102 million pounds in just May and June alone.
PPI a “stain” on financial industry
The FSA is releasing the records of the PPI compensations in an effort to restore transprancy and good faith in the financial sector. Margaret Cole of the FSA said: “The treatment of PPI complainants has left an indelible stain on the financial industry’s record. By releasing these figures we’re providing a useful measure of firms’ progress that can be tracked on an ongoing basis.
“While the amount of redress paid in May and June is unsurprisingly large in the wake of the judicial review, looking ahead we expect the amounts to vary somewhat as firms clear their backlogs while dealing with complaints as well,” continued Ms. Cole.
FSA To Continue Monitoring
She added: “We remain 100pc committed to ensuring that where consumers were mis-sold PPI they will receive the appropriate redress from firms, and we are monitoring firms’ progress to ensure this is done properly.”
“Where we find that this not to be the case, we are not afraid to take tough action.”
In addition to this, the Financial Ombudsman Service has been asked to adjudicate on over 265,000 PPI cases, receiving 63,271 so far this financial year and 104,579 last year. Ombudsman says it upheld an average of 3 out of 4 complaints, with redress averaging around 2,750 pounds. According to ombudsman service, more than 380 million pounds have been paid out as a result of its involvement.