(Alliance News) - Studio Retail Group PLC said Wednesday its largest unit saw payment protection insurance complaints rise "very significantly" ahead of the deadline for claims in late August, resulting in a provision of up to GBP10 million to cover them.
UK consumers were given until August 29 by the UK Financial Conduct Authority to make a complaint about being sold payment protection insurance from a number of lenders.
Studio Retail said its largest business unit - Studio - had sold PPI policies until 2008, subsequently communicating with consumers with regards to PPI between 2012 and 2015. Following this period of consumer engagement, Studio paid out GBP7.5 million in PPI refunds. Since 2015, however, complaints have been "low."
In the days leading up to the late August deadline, however, the level of PPI information requests and direct complaints increased "very significantly." This has included a "large block" of claims for the official receiver on behalf of bankrupt customers.
"As with other lenders, we are evaluating the validity and quality of these new claims," Studio said in a statement.
Studio expects to reject a "majority" of the requests and complaints submitted.
Despite this, the firm anticipates that a further provision of between GBP6 million and GBP10 million will be required in its interim results due to be reported in November. These provisions would include the cost of reviewing and administering the claims.
For the year ended March 29, Studio Retail - then known as Findel PLC - reported GBP29.4 million pretax profit on revenue of GBP408.7 million.
Shares in Studio Retail were 3.2% lower at 200.00 pence in London on Wednesday.
By Ahren Lester; ahrenlester@alliancenews.com
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