HSBC has set aside a further £340m to fund payment protection insurance (PPI) compensation claims, bringing total PPI provisions across UK banks to a staggering £10bn.
Last week Lloyds increased the amount set aside for PPI claims to £4.3bn, while RBS is expected to set aside more money when it reports its results this Friday.
The five biggest banks alone – HSBC, Royal Bank of Scotland (RBS), Barclays, Lloyds Banking Group and Santander – have now put aside a total of £8.8bn.
‘PPI on course to become biggest consumer financial scandal of all time’
Which? chief executive Peter Vicary-Smith said: ‘These latest figures from the banks show that PPI is now on course to become the biggest consumer financial scandal of all time, exceeding pensions mis-selling and the endowment mortgage scandal.
‘The banks must make it straightforward for people to reclaim PPI themselves, for free, so they don’t resort to expensive and unnecessary claims management companies (CMCs).
‘We now need the Government to raise its game too, and toughen up the regulation of unscrupulous CMCs who are exploiting consumers who just want to claim back what is rightfully theirs.’
Helping consumers to make PPI complaints themselves
We have been at the forefront of campaigning to make PPI claims easier. Since the launch of our free online PPI complaints tool in 2009, which enables consumers to pursue a complaint to their PPI provider and claim money back themselves, more than 24,250 complaints have been facilitated – with almost 2,000 in July this year alone.
The Financial Services Authority (FSA) said that £4.8bn has been paid out to consumers mis-sold PPI between the beginning 2011 and the end of May 2012. This leaves around £5bn still to be claimed.
Don’t be put off from complaining about mis-sold PPI
Some banks make it easier than others to complain about mis-sold PPI. When Which? Money investigated banks’ websites earlier this year, we felt that Co-operative Bank, HSBC, Lloyds TSB and MBNA had a good amount of information on making a PPI complaint. Other banks’ websites weren’t so helpful.
Action point: If you think you may have been mis-sold PPI, use our PPI checklist to find out if you could be eligible for compensation. If you decide to make a complaint, you can use our free PPI complaint tool to generate your letter.