PPI compensation has turned portions of Britain into fraudsters – bank boss
Financial Conduct Authority figures show £32.2bn has been paid out to claimants since 2011.
The PPI scandal has turned “portions of Britain into fraudsters”, the chairman of Barclays has warned.
John McFarlane said that an “enormous” proportion of claims for compensation over mis-sold payment protection insurance have been bogus.
The latest Financial Conduct Authority figures show £32.2 billion has been paid out to claimants since 2011, with £353 million paid in July alone.
It is almost inconceivable to think that £50 billion was missold. The percentage of fraudulent claims is enormous John McFarlane, Barclays
Some consumer groups estimate the total of mis-sold policies to be around £50 billion and customers can continue making claims until August 2019.
Banks have had to set aside billions of pounds in compensation, while Barclays blamed PPI charges for taking chunk out of profits in the first half of this year.
“It is almost inconceivable to think that £50 billion was missold,” Mr McFarlane told the Mail on Sunday.
“The percentage of fraudulent claims is enormous. We have turned portions of Britain into fraudsters.”
The scale of the PPI scandal and its associated compensation claims has prompted concerns that some unscrupulous claims management companies have abused the system.
As well as using management companies, customers can make claims themselves by complaining directly to their provider or via the Financial Ombudsman Service (FOS).
If you have received a letter from your provider warning you about the mis-selling of PPI, you have 3 years from the time it was sent to make a complaint - which may fall sooner than the 29 August 2019 deadline. https://t.co/mTkrfZeFYT pic.twitter.com/qj24WaZwXV— The FCA PPI Complaints Deadline (@ppifca) September 21, 2018
As many as 64 million PPI policies have been sold in the UK, some stretching as far back as the 1970s.
Policies were added on to products such as personal and business loans, credit cards, store cards, mortgages, catalogue credit and other types of credit, such as car finance and hire purchase agreements for household items.
PPI was meant to help people cover repayments if they found they could not due to a sudden change in personal circumstances, for example being made redundant, having an accident or being ill.
But PPI became controversial as it was widely mis-sold, with people feeling pressured into taking it out, finding it was unsuitable for their circumstances or even finding PPI had been added without them realising it.
The deadline for complaints to providers or to the FOS is August 29 2019.