| Banks, Lloyds PPI Claim, PPI, PPI Refund

After the disastrous PPI mis-selling scandal, Lloyds Banking Group decided to set aside £350 million in order to cover the claims for PPI mis-sold to their customers. The bank further made additional provisions after the Financial Conduct Authority declared that the deadline for making new PPI complaints would be August 2019.

Since there was an outbreak amongst the customers for getting their compensation for mis-sold PPI, Lloyds had set aside a sum of £17 billion for their customers. The considerably high sum of £350 million in order to cover for the extra two months added to the deadline follows the announcement made by the Financial Conduct Authority that the some of the bank customers would claim compensation if they were not informed about the commission payable when they were sold PPI.

This followed a Supreme Court judgement in November 2014. This is famously known as the Plevindecision, which changed the definition of mis-sold PPI. The court finally agreed to the fact that it is illegal for banks to hide the fact that they will receive heavy commission from the buyers of PPI when they were being sold the policy. The Financial Conduct Authority also decided that commission will be calculated in the case thecommission accruedwas more than 50%.PPI claimants who have been rejected in the past but are now eligible under the Plevin rulingwill receive a letter that explains to them that they have new grounds for making a PPI claim.

Lloyds made an official filing to the Securities and Exchange Commission, stating that the additional £350 million worth of provision would be reflected in its results pertaining to the first quarter which was announced on 27th April. However, this had no impact on the guidance.

There were banks like The Royal Bank of Scotland which had set aside £601 million to compensate for the mis-sold PPI who refused to make any comments on future provisions for PPI claims. Barclays, whois also considered as a chief offender of PPI, refused to make any comments. The claims made by mis-sold PPI customers have gradually started to fall, and in the most recent results, the PPI provisions for Lloyds fell to £1 billion. This is much less when compared to the sum of £4 billion in the year of 2015.

Also, the pre-tax profit in the country rose to a whopping £4.2 billion from £1.6 billion. Not just this, post the compensation practices, the shares in Lloyds rose by 0.7% to 60p.

Check now for FREE
Share this post: