07 March 2016
January 2016 and the news once again, contains a story of a major UK bank adding yet more money to its Payment Protection Insurance (PPI) compensation pot.
Santander has added yet another £450 million to its PPI compensation fund in a move that has seen the UK arm of the Spanish bank notch up losses of £82 million for the fourth quarter in a row. The news came not long after the Royal Bank of Scotland announced it had added another £500 million to its PPI compensation fund.
Although the announcement by Santander in late January comes a year after its last top up, the financial industry roundly expects that this will be the last top needed by this bank to cover PPI compensation claims by its customers. In total, Santander has set aside £1.5 billion in total.
Although this is may seem a huge amount for Santander to have set aside, it is nothing in comparison to other banks and banking groups. Lloyds Banking Groups for example, has set aside £13billion in its PPI compensation fund.
But, there could be further changes lurking in the PPI scandal. The Financial Conduct Authority (FCA) is currently consulting on a proposed 2018 PPI deadline, as well as considering the impact, if any, of the recent outcome of the court case, Plevin V Paragon Personal Finance.
Susan Plevin, a retired college lecturer, took issue with Paragon Personal Finance for not disclosing how much commission was paid on the PPI policy that was mis-sold to her. This breach of the Consumer Credit Act was upheld by the court. The implications on all the PPI compensation claim, both settled and future claims, has yet to be decided.
When banks add more money to their PPI compensation pots, it sends an important signal to the financial markets, regulators and customers.
Effectively, the bank - in this case, Santander - is admitting that there are more PPI compensation claims to come and that the customer has a genuine and rightful claim to their money back. If you have been a customer of Santander or Bradford and Bingley or Abbey National - two banks that Santander bought in recent times - then you could have a claim for mis-sold PPI.