The latest data released by the Financial Conduct Authority shows that PPI compensation payments have increased year-on-year for the third month in a row.
On the Financial Conduct Authority´s website, the city watchdog maintains a table recording the PPI compensation payments made each month by banks and other credit providers. The table has just been updated to include the PPI compensation payments for February 2015 – the third month in a row that PPI compensation payments have increased compared to twelve months ago.
The figure for February 2015 – £361 million – is a 9.5% increase on the £329.5 million that was paid in PPI compensation payments in February 2014. The percentage increase is similar to the rise in PPI compensation payments identified in January 2015 (£424.5 million from £389.2 million) and follows the 26% year-on-year increase in PPI compensation payments seen in December 2014.
The rise in PPI compensation payments does not necessarily indicate that more PPI claims are being submitted by ripped-off customers, just that more are being settled. It is possibly the case that banks and other credit providers are treating their customers´ claims more fairly than before – when many customers had to appeal to the Financial Ombudsman Service to recover what they were due.
Until the Financial Ombudsman Service produces its H1 report at the end of June, the reason for the rise in PPI compensation payments can only be a matter of speculation. However, the upward trend in PPI compensation payments appears to go against a prediction by the ratings agency Standard & Poor that “the worst period for PPI provisions has now passed”.
The rating agency´s prediction came in a report forecasting how much the four leading banking groups may still be liable for to pay for past “mistakes”. Since 2010, Lloyds, Barclays, HSBC and the RBS Group have paid out more than £42 billion in fines, charges and redress – not just for the mis-selling of PPI, but also for the mis-selling of interest rate products, LIBOR rigging, and the manipulation of foreign exchange markets.
Standard & Poor forecast that the four banking groups would allocate a further £19 billion before the end of 2016 to pay for their previous wrong-doings – a forecast that was followed by the announcements that Barclays was setting aside £800 million to pay fines for foreign exchange manipulation and £150 million for PPI compensation payments, and that the RBS Group and the HSBC Group were both setting aside a further £100 million towards their PPI obligations.Read More