In 2017, it was reported that the payment protection insurance (PPI) scandal had cost some of Britain’s largest high street banks more than £34bn. Yet our analysis of over 1.25 complaints shows that the last kicks of PPI are still to come.
With the PPI complaints deadline looming on August 29th 2019, our data shows that many banks are experiencing a flood of new claims. If they fail to address this, they will be hit with fresh fines from the Financial Conduct Authority (FCA).
So, what's the increase in compensation claims?
Our analysis reveals that a leading UK high street bank saw the number of PPI complaints increase by 50% between H2 2017 and H1 2018.
Another leading UK high street bank saw the number of complaints increase by 28% between H2 2017 and H1 2019 (to date). This firm has already seen a huge volume of complaints made against it and it may now be on track for another round of regulatory penalties.
The remaining two leading UK high street banks are also seeing an increase in the numbers of complaints, though at lower percentage increases.
Of the global organisations analysed, a major US firm that operates a retail bank in the UK has seen a 900% increase in complaints. This is despite the number of complaints being traditionally low for this firm. A leading European firm with retail operations
in the UK also saw a 10% increase in complaints.
Why does it matter?
While most PPI complaints occurred before 2015, there are a number of firms that might be worried about this final wave. Our data shows that, once a firm experiences more than a 100% increase in complaints on a specific topic to the ombudsman, enforcement
activity and restitution becomes inevitable. Regulatory penalties will be unavoidable.
What action should the banks take?
Banks need to take note that, for specific types of complaints, the restitution outweighs the enforcement amounts that are levied by the regulators. They are taking restitution very seriously, making sure consumers are fully compensated. The banks in question
need to provision capital or they will face a major shock down the line.