There’s no one-button solution for PPI mis-selling, according to experts. However, the figures showing the losses of Lloyds, Santander and RBS from the start of 2016 is a sign that other banks, including Barclays, HSBC and other non-high street banks, will be facing bigger numbers by the end of the year.
Experts believe the FCA’s consultation, when successful, will have the remaining consumers making a claim. Laying down a margin of error, experts said it is possible FOS claims will increase as well. This would result in higher administrative charges as the FOS is at the top of the expenses chain banks currently have.
With the earmarking of about £4mn by the start of 2016 by three banks, experts said it isn’t farfetched that banks can face about £5 to £7bn for PPI mis-selling in 2017 and the amount may further increase by the end of the year.
Meanwhile, the total bill for mis-sold PPI has reached £34 billion with about £27 billion returned to consumers.
Lloyds stocks are suffering as it allocates the biggest half of PPI refunds during its announcement. Lloyds is to earmark £2.5 billion for its misgivings, taking half of the predicted £5bn early this year.
Payment protection insurance policies refund at an average of £3,500 to £4,000 for single-premium PPI. The latter is commonly mis-sold to consumers.