The FCA has already placed a temporary deadline for payment protection insurance claims on June 2019. It was a move further than the initial Spring 2018. Banks brace for further mis-sold PPI compensation as the FCA further delays its statement regarding the PPI deadline.
Further deadlines for banks will result in higher recompense allocations due to administrative and refund costs. During the deadline move from 2018 to 2019, banks had expressed their disappointment with the Financial Conduct Authority and analysts speculate the industry would add a collective £2bn further until the deadline.
Currently, the total PPI bill is at £40bn with banking giant taxpayer-backed Lloyds leading with £17bn. It is the biggest financial scandal in the history of the country.
The regulator said it would consider all results of its consultation with consumers, banks and claims management companies. Consumer groups have expressed disappointment for the initial deadline proposal stating that it took a decade for banks to sell and profit illegitimately with mis-sold PPI. They said cutting consumers short of time for reclaiming their insurance repayments is unfair.
According to the Competition and Markets Authority, the ballooning value of the mis-sold PPI refund total is due to banks failing to send a notice to consumers of the possibility they are mis-sold the said insurance policy. Taken over by legitimate claims management companies — using trial and error methods to see whether their potential clients have mis-sold PPI — administrative costs have inflated over the years since 2010.