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Banks may be liable for further £1bn PPI payout shortfall

by: Professional Adviser
  • 05/06/2014
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Banks may be liable for further £1bn PPI payout shortfall
Some leading banks may have underpaid compensation certain customers are due for mis-sold Payment Protection Insurance, the BBC has learned.

One expert, commissioned by the BBC, estimates it could amount to “somewhere in the region of £1bn”.

The customers potentially affected had PPI on credit cards issued by Lloyds Banking Group, Barclays, MBNA and Capital One.

All claim to make every effort to pay a correct amount of compensation.

The extent of the shortfall is difficult to assess at this stage.

The shortfall in compensation arises because, although these banks all refunded the premiums on their mis-sold PPI policies plus interest as regulators require, they have been failing correctly to refund additional charges which were triggered by the premiums of the mis-sold PPI policies.

This failure to include fees and charges in compensation calculations has resulted in dramatic reductions to the amounts some customers have received.

All of the banks concerned declined an invitation to be interviewed or to respond on how their compensation calculations work.

 In a statement to the BBC, Lloyds Banking Group said: “When a customer lets us know that they may have incurred other costs because of their PPI policy, we will investigate and make an appropriate refund.”

Regulators have told the BBC that such fees and charges should be included in the initial offers that banks make.

Charlotte Webster, campaign manager, Move Your Money said: “Once again, we’re seeing big finance trying to get away with minimal effort. If MBNA, Lloyds, Barclays and Capital One still owe customers £1 billion, it’s not surprising so many Brits are rejecting the arrogance of our city culture.”

 

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