Millions more could be owed PPI

March 7, 2017 8:14 am Published by Millions more could be owed PPI

Millions more people than previously thought could be eligible for compensation for PPI mis-selling.

As the UK watchdog finally confirmed the PPI claims deadline date, new figures have emerged which show that just 1 in 5 people have made a claim so far and millions more policies have been sold.


The Financial Conduct Authority (FCA) have confirmed the time bar date for future PPI claims will be August 29th 2019.

It will be preceded by a two year consumer awareness advertising campaign to try to make sure anyone who thinks they may have a claim for mis-selling gets it done before the deadline removes the right forever.


The FCA also revealed it believes it previously underestimated the number of policies sold by up to 19 million.

The regulator had previously said it believed around 45 million policies were sold between 1990 and 2010.  Now, in answer to a Freedom of Information request, it says it believes between 52 million and 64 million policies were sold to 30 million consumers.


It also admitted that only around 1 in 5 policies (13 million) has had a mis-selling complaint made against it. The new figures mean there could be more than 50 million potential future claims.

Not all policies will have been mis-sold, but the scale of one of Britain’s biggest ever financial scandals has been ramped up considerably.


If the figures are correct it seems likely that the banking industry will need to add many more millions to their PPI compensation provision.

Latest FCA figures show £26.2 billion has already been paid compensation with £3.6 billion being paid in 2016 alone – an average of £301.9 million a month.

PPI bill

Research by the New City Agenda think tank shows the banks have set aside a total of more than £40 billion to pay the PPI bill:

  • Lloyds £17.1 billion
  • Barclays £8.5 billion
  • Royal Bank Of Scotland (RBS) £4.7 billion
  • HSBC £2.9 billion
  • Bank of America (MBNA) £1.5 billion
  • CYBG (formerly Clydesdale Yorkshire) £1.6 billion
  • Santander £1.2 billion
  • Others (smaller banks and building societies) £2.2 billion

It is worthwhile noting that not all of this money has been redress for premiums.  It also includes two kinds of interest – statutory and account – and the banks’ administrative costs in dealing with the problem so far.


Announcing the deadline date FCA chief executive, Andrew Bailey, said: “Putting in place a deadline and campaign will mean people who were potentially mis-sold PPI will be prompted to take action rather than put it off. We believe that two years is a reasonable time for consumers to decide whether they wish to make a complaint.

“We have carefully considered the feedback we received and we still believe that introducing a deadline for PPI complaints and a communications campaign warning of the deadline will benefit consumers.”

Time barred

The FCA also gave a warning that claims could be time barred for some people before August 2019.

The deadline statement said: ““Some consumers, including those who have previously been told by their firm that they may have been mis-sold, may run out of time sooner.”

These are PPI policy holders who have already received a warning letter from their bank saying they are potentially at risk of being mis-sold.  In their case the deadline date will be two years from the date of the letter they received.


The August 2019 deadline will also apply to potential claims brought under the Supreme Court’s Plevin ruling which said policies may have been mis-sold if the purchaser was not made aware of the high level of commission being paid on the sale.

The announcement said: “The Plevin decision means that consumers may have new grounds to complain about PPI regarding the amount of money that the providers received for the sale if the failure to disclose that commission made the relationship unfair.

“As proposed, the FCA’s approach includes a 50% commission ‘tipping point’ at which firms should presume, for handling PPI complaints, that the failure to disclose commission gave rise to an unfair relationship, and that profit share should be included in firms’ calculation of commission. Redress will be calculated as the excess commission over the 50% tipping point.”

Waiting game

Now the waiting game begins.

The deadline announcement is expected to trigger a deluge of new PPI claims with consumers determined to beat the deadline.

The high street banks have increased their compensation provision in the last 12 months in anticipation of a rash of new claims, but they have already warned their shareholders the amount set aside may not be enough.

With the FCA’s new estimate of the figures involved, they may well be proved right.

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This post was written by Mark Buckley