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Archive for tag: PPI Advertising Campaign

£3 billion – The Figure that says the PPI Advertising Campaign IS Working

Hand in hand with the August 2019 PPI deadline is the advertising campaign encouraging people to 'make a decision' about whether to claim PPI or not.

And it seems to be working.

Gold

Increasing PPI Compensation Pots

Since the PPI scandal broke, the banks have had to revise their estimates of how much money they would pay out in compensation. It seems that over the years, they have continually underestimated not only how many customers they owed compensation to but how much.

So far, UK lenders have waved goodbye to £29.2 billion, a far bigger figure than the few million the banks predicted was the size of the problem back in 2011/12.

But at the end of February 2018, Royal Bank of Scotland (RBS), Lloyds, Barclays and HSBC all announced that they faced bigger charges relating to PPI compensation than they thought. And experts believe it is because the advertising campaign is making its mark.

Underestimation

The PPI deadline announced for August 2019 disappointed many for different reasons. And with the promise of a hard-hitting advertising campaign to match, it was hard to see how the banks would not have been hit further.

And it seems that the banks were still underestimating their customers…

  • RBS - they were the last to declare an addition to their PPI compensation fund, adding another £175 million to during the last week of February.
  • Lloyds Banking Group - pushing its tally to a staggering £18.8 billion, Lloyds added another £1.7 billion at the start of the year. A move, it said, mirrored the "increased complaint levels including the impact of the first FCA advertising campaign".

PPI as a banking 'risk factor'

Of course, RBS and Lloyds are not the only banks to be hit by PPI compensation claims. With their annual reports released, most if not all banks and lenders made reference to PPI but significantly, for the first time, it was referred to as a risk factor. This means that the PPI compensation bill will still be having an effect on the bank finances long after the 2019 PPI deadline.

For instance, RBS expects half a million complaints before the deadline rolls around, on top of the 2.4 million complaints that have been made to them already. And that could mean an increased bill of £30 million.

Barclays estimates complaints of a nearly twice that, meaning they could have an additional amount of £100 million to find in the form of PPI compensation.

Some smaller banks could be facing an uncertain future as a result of PPI risk. For example, Clydesdale and Yorkshire banks, owned by CYBG, is at risk of PPI compensation outstripping its indemnities - in other words, it will pay out more than it is worth.

There could be £15 billion of PPI compensation yet to be claimed. Is your PPI claim part of it?