Banks admit defeat as PPI row finally ends - Insurance - News - Moneyfacts

News News brings you the latest financial & economic news & reviews of the best products in the UK by our team of money experts.

Banks admit defeat as PPI row finally ends

Banks admit defeat as PPI row finally ends

Category: Insurance

Updated: 09/05/2011
First Published: 09/05/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The UK's banks have admitted defeat as the lengthy row over the mis-selling of payment protection insurance (PPI) finally draws to a close.

The major high street banks have spent the past few days revealing they had put billions of pounds aside to compensate affected customers.

And now the British Bankers' Association (BBA), the organisation which represents the interests of the UK's banks, has confirmed that it will not appeal after losing a court challenge against new rules on mis-selling.

Lloyds Banking Group revealed last week it had put £3.2 billion aside to pay possible claims.

Barclays has made a £1 billion provision for claims and HSBC £269 million.

Royal Bank of Scotland did not put a figure on the amount it might have to pay out, but admitted the liability could prove 'material'.

"In the interest of providing certainty for their customers, the banks and the BBA have decided that they do not intend to appeal," said a statement from the BBA.

Welcoming the news, Which? said the banks had, at last, seen sense.

"Hopefully this will be a watershed moment in how banks treat their customers," said the watchdog's chief executive, Peter Vicary-Smith.

"It was a colossal error of judgment by the BBA to have brought this case in the first place, which has even further diminished the banking industry's reputation in the eyes of consumers."

Mr Vicary-Smith has called on the banks to make amends by quickly reimbursing the millions of people it has 'ripped off'.

"There could still be huge numbers of people out there who were duped into buying PPI and unaware they can make a claim," he added.

"We urge these people to contact their bank immediately to ask for their money back."

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Claims costs fall on Friday 13th

Friday 13th may be unlucky for some, but interestingly, this means people actually take more care on this one key day than at other times, with average claims costs falling dramatically on this supposedly unlucky date.

£27 million: the cost of insuring Santa

As Father Christmas prepares for his big night, Towergate has estimated the cost to insure him as he journeys around the country spreading joy, delivering gifts, and eating mince pies. The figure: an impressive £27,143,554.20!

Insurance premiums set to rise even more

One of the most unwelcome aspects of yesterday’s Autumn Statement was the rise in Insurance Premium Tax – it’ll be the third time it’s risen in little more than 18 months – and unfortunately, it means insurance premiums are set to rise even further.