FSA figures have today shown that almost £2bn was paid out by lenders in 2011 to compensate customers mis-sold PPI, with a new monthly high reached in December of £441m made in payments.
This was 16% up on November’s total of £379m and 64% up on October’s figure of £268m.
The FSA figures only include data from 16 firms that accounted for 92% of all PPI complaints in the first half of the year, meaning the real total is likely to have already exceeded the £2bn mark.
However, Which? highlighted that the redress made in 2011 was just a quarter of the estimated £7.6bn set aside by banks to meet claims by customers.
It warned that the slow process was creating an “open goal” for claims management companies, with PPI claims potentially worth more than £2bn to such firms based on their average fee of 30%.
Which? executive director Richard Lloyd said: “It’s good to see the PPI payout is finally starting to speed up, but last year’s compensation of £1.9bn is a quarter of what lenders expected to refund.
“Too many people are still finding the claims process too lengthy; the banks must streamline the process to make it easier for people to claim. Otherwise, this leaves an open goal for claims management companies that charge people a hefty fee for putting in a claim which is easily done yourself for free.
“Which? has found dubious practice by claims managers, including bombarding people with misleading information about getting PPI compensation.”
An investigation by Which? in September last year showed that the majority of claims companies it contacted failed to comply with rules set out by the Ministry of Justice, and warned the sector to “clean up its act”.
