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PPI payouts reach £10.5 billion

PPI payouts reach £10.5 billion

Category: Insurance

Updated: 23/07/2013
First Published: 22/07/2013

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 It is now over 6 months old so the content may be out of date.

Over £10.5 billion has been paid out to customers affected by the mis-selling of payment protection insurance (PPI) since January 2011, making it the biggest scandal to ever hit the banking sector.

Figures released today by the Financial Conduct Authority (FCA) have revealed total refunds issued during May this year stood at £422 million, down from £424 million in April and £735 million in May 2012.

The FCA's data was taken from 24 firms making up 96% of PPI complaints. During 2011, sixteen firms were covered accounting for 92% of all PPI complaints.

The number of complaints surrounding mis-sold PPI has steadily grown, particularly since April 2011 when a High Court judgement was ruled in favour of regulatory PPI compensation measures.

Millions of people were persuaded by lenders to take out PPI when applying for mortgage, credit card and loan products, whilst in a large number of cases, customers were signed up for the cover without them even knowing.

The scandal has cost the financial industry dearly, with many high street banks forced to set aside billions of pounds to cover the cost of compensating disgruntled customers.

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