PPI payouts reach £215 million

man holding pound notes

Banks have paid out £215 million in payment protection insurance (PPI) compensation between January and June 2011, Financial Services Authority (FSA) figures show.

"By releasing these figures we're providing a useful measure of firms' progress that can be tracked on an ongoing basis," says FSA spokesperson Margaret Cole.

The information released shows that the month of June was the busiest with £65 million worth of payouts made.

"While the amount of redress paid in May and June is unsurprisingly large in the wake of the judicial review, looking ahead we expect the amounts to vary somewhat as firms clear their backlogs while dealing with complaints as well," adds Cole.

In total, the Financial Ombudsman Service (FOS) has received more than a quarter of a million PPI cases, with a record 104,597 in the last financial year.

How to reclaim your PPI premiums

75% of claims paid out

It has upheld three out of four PPI complaints, explaining the huge sums financial firms now have to pay out. The average payout is £2,750.

Cole admits that the PPI mis-selling scandal has left "an indelible stain on the financial industry's record," but vows that the FSA, along with the FOS, will do everything in its power to ensure customers can claim redress.

The FSA extended the response period to PPI complaints from the standard eight weeks to 16 weeks because of the large number of cases.

From 1 September the complaints period will reduce to 12 weeks and this is expected to return to the standard eight-week timeframe in 2012.


More about