Over 1.5 million customers have made claims against Barclays for mis-sold payment protection insurance (PPI), with the average pay out worth £1,808, according to the bank’s end of year accounts, published today.
The figures, which exclude claims from people who never held the product, show that 86% of PPI claims were upheld in consumers’ favour in 2015, significantly higher than the figure for the previous year, which was 79%.
As a result, Barclays had to increase the money it put aside for claims by £2 billion in 2015. It has now allocated a massive £7.2 billion to compensate customers for mis-selling the flawed insurance product.
Barclays says the extra money allocated for PPI provisions reflects a “slower than expected decline in claims volumes during 2015”, as well as a potential 2018 deadline for PPI claims that’s being considered by the financial regulator.
Do you have a PPI claim?
Barclays’ accounts state that it has tried to proactively contact 680,000 customers regarding PPI policies, but only a quarter of customers (28%) have replied.
Though the average compensation paid by Barclays was £1,808, this includes redress paid through claims management companies, which can take up to a quarter of the money, according to recent estimates from the National Audit Office.
But don’t be tempted to submit a claim via a claims management company.
If you’ve taken out a loan, credit card or mortgage, check your records or contact your lender to see if you have a PPI claim. Read our checklist of people who may qualify for compensation – this info includes a template letter to make the reclaiming process as easy as possible.
If this doesn’t work, you can take your gripe to the free Financial Ombudsman Service.
And don’t think the issue just affects Barclays’ customers. Lloyds and RBS published their 2015 PPI claims figures last week, revealing they’ve put aside more than £20 billion to repay customers – equivalent to more than £300 for every person in the country.
Bad news for investors
Barclays’ shareholders were badly hit this morning, with the company announcing it will slash its dividend by more than half to 3p in light of falling profits. Shares were trading around 10% lower than at the start of the day at 154.5p at midday.