Posted: 21st June 2017
& filed under PPI
Barclays- The Global Reach of UK Mis-sold PPI
It’s recently been reported that Barclays is facing a court case in excess of £1bn for the mis-selling of PPI (Payment Protection Insurance) policies. The alleged claim has been made by a British subsidiary of a US company, which had acquired the business from Barclays 10 years ago.
The law suit has seen PPI’s global reach, with PPI mis-selling makings it’s way to the US.
The alleged lawsuit adds to the anguish of bank provisioning. Nevertheless, those who have been following PPI developments will already be aware that PPI - even on standard superficial analysis - has cost UK banks dearly.
For starters, the recent Financial Conduct Authority data, taken at the end of February 2017, shows that £26.7bn of redress has been paid to the victims from some of the major banks in the UK.
Though it’s been showed that around half of the figure relates to repaid interest, it means that an approximate of £13bn PPI premium has been refunded. But, research also shows that the financial regulator is completely clueless of how much PPI was exactly sold.
However, some analysts believe that the rough figure is £60bn, which suggests that less than a quarter of individuals who may have been mis-sold PPI have bothered to consider whether they have it or not. Worryingly, 75% of people who haven’t yet considered their position could perhaps lose out on the refund if the FCA time proposal continues without any “checks and balances”.
Clearly, different banks have different PPI inheritance issues as proved by the loss provisions assigned by several banks over the past few years. But, as per the FCA complaint data, Barclays has around 160,650 open complaints related to PPI. Putting this into context, Barclays PPI complaints represent 140 complaints in every 1,000 live products.
The Financial Ombudsman Service data shows that they have received around 7,044 complaints in regards to Barclays PPI from 1st July 2016 to 31st December 2016, and in the last 6 months they’ve upheld approximately 61% of Barclays PPI complaints in favor of the complaining customers.
There are individuals who had hoped that we were nearing the end of PPI headlines, such as the proposed PPI deadline- this would shut out lawful claims and cause customers a loss if not claimed. However, such headlines show that it’ll only be an unsuitable guillotine that would close the issue-whether it’s fair to customers or not.