Statistics released by the FSA indicates that banks and financial institutions have paid compensation worth £5.5 billion to victims of mis-sold PPI policies over a span of 18 months ending in June 2012. Of course, not all claims have been settled and analysts expect this figure to rise to £10 billion before the issue will be fully settled. The intensity of the crisis can be understood from the fact that close to £615 million was paid to victims in the month of June 2012 alone.
These figures have been collected from 24 firms and financial institutions that received complaints relating to missold PPI policies in 2012. 96% of all the complaints received were filed with one of the twenty four firms stated above. The FSA has been taking steps to improve the authenticity and reliability of the data and has covered more firms in 2012. The FSA pointed out that it received statistics from 16 firms in 2011 which covered about 92% of the total number of complaints relating to missold PPI policies received. This year, there has been an increase in not just the number of complaints but also the firms that received complaints relating to missold PPI policies from customers.
There is near consensus that complaints relating to missold PPI policies will continue to rise. The Ministry of Justice has stepped in and has indicated that it would not tolerate unsubstantiated PPI claims filed by unscrupulous claims management companies. The Ministry has made it clear that improper complaints or unsolicited claims filed by these companies will result in penal action. These companies help people recover money paid on missold PPI due from banks and financial institutions. The Ministry of Justice has warned that the CMCs will be compelled to pay compensation if they provide poor service to their customers.
