Consumers paid £1.9bn in 2011 PPI compensation - Insurance - News - Moneyfacts


Consumers paid £1.9bn in 2011 PPI compensation

Consumers paid £1.9bn in 2011 PPI compensation

Category: Insurance

Updated: 22/02/2012
First Published: 22/02/2012

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 It is now over 6 months old so the content may be out of date.

Consumers were paid out to the tune of £1.9 billion last year in compensation for being mis-sold payment protection insurance (PPI).

The figures were boosted significantly by the £441 million that was paid out in December to PPI customers.

PPI payments have accelerated since April when providers were ordered to deal with claims from customers who said they had been mis-sold the policies.

The insurance was typically sold with credit cards and other unsecured lending on the basis that customers were covered if circumstances meant they could no longer meet their monthly payments.

But providers are facing calls to pay out PPI redress in a speedier manner.

The Financial Services Authority (FSA) releases data each month which shows how much providers have paid back to PPI customers each month.

The figures are based on feedback given to the regulator by 16 unnamed firms which accept the vast majority of PPI payments (92% of all PPI complaints in the first half of the year).

Recent months have seen monthly compensation given out to PPI customers increase, with £268 million in October and £379 million in November.

But Which? has called on banks to improve their PPI processes, with the consumer group saying that figures show that only a quarter of the amount set aside for claims was paid out last year.

"Too many people are still finding the claims process too lengthy, the banks must streamline the process to make it easier for people to claim," said Richard Lloyd, executive director of Which?.

"Otherwise this leaves an open goal for claims management companies that charge people a hefty fee for putting in a claim which is easily done yourself for free.

"Which? has found dubious practice by claims managers, including bombarding people with misleading information about getting PPI compensation."

Compare insurance providers

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 Any products featured may be withdrawn by their provider or changed at any time.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

£2,833: the cost of a burglary

A while ago, a local newspaper featured a story of a burglary that saw thieves come in through the attic – an unusual sight. What most stories on burglary don’t feature, however, is the cost to the victims: a £2,833 bill.

Another insurance tax rise hits our wallets

At the beginning of this month a new rate of insurance premium tax came into effect, meaning it now stands at 10%, up from 9.5%. The ABI has called this a “raid on the responsible”, but what does it mean for you?

Students leaving home with £2K in belongings

Students nowadays leave for university with a lot more high-tech gadgets than they used to, resulting in an average £1,896 worth of property which could be dangerously under-protected.