RE: PPi28 Aug 2019 09:29
Reuters
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WED AUG 28, 2019 / 7:39 AM BST
Britain's costliest consumer banking scandal may have sting in its tail
Iain Withers and Sinead Cruise
FILE PHOTO: People look out onto the Canary Wharf financial district in London, Britain August 11, 2019.
REUTERS/SIMON DAWSON/FILE PHOTO
FILE PHOTO: People walk by the River Thames across from the financial district of London, Britain, September 23, 2018.
REUTERS/HENRY NICHOLLS/FILE PHOTO
LONDON (Reuters) - Britain's most costly consumer banking scandal could yet have a sting in the tail even after an August 29 compensation deadline, as a 1 billion pound claims industry takes its fight to the courts.
The payment protection insurance (PPI) saga is due to close on Thursday after eight years and 36 billion pounds of compensation payouts to consumers who were mis-sold policies on a vast scale.
But banks have been warned that PPI has created a burgeoning claims industry and that celebrating the end of the scandal could be premature.
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Several claims firms told Reuters they would continue to pursue PPI payouts through the courts, while others re-train staff to seek compensation for mis-selling of other products including investments and high-cost credit.
"People may have thought the deadline would be the end of it, but it may not go away," said Ian Bond, a director at law firm Talbots Law who works on PPI claims.
Think tank New City Agenda last week estimated the total bill for PPI would top 50 billion pounds, or five times the cost of the London 2012 Olympics.
It also estimated billions of pounds would likely remain unclaimed, leaving fertile ground for claims firms to exploit.
Britons could scarcely have missed reminders of the PPI claims deadline after being bombarded by adverts fronted by actor-turned-U.S. politician Arnold Schwarzenegger, paid for by watchdog the Financial Conduct Authority (FCA).
PPI policies were sold alongside a personal loan or mortgage to cover repayments if borrowers fell ill or lost jobs but most were sold unsuitable policies and would never have been able to claim.
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Most people have sought compensation directly with their bank, but a sizeable industry also emerged to handle claims.
Ten of the largest claims firms employ more than 3,000 people between them and have amassed 1.1 billion in revenues over the claims period, according to Companies House documents.
Some banks have been caught out by a late surge in PPI claims, forcing Lloyds, HSBC and the UK arm of Spanish bank Santander to set aside an extra 1.1 billion pounds collectively in half-year results.
Others, including Clydesdale Bank and Barclays, are likely to make further p