The consumer group Which? has estimated that the money currently set aside by the banks to pay consumers compensation for mis-sold PPI could run out as early as December of this year.
Of course, that doesn’t mean that the banks will have to stop paying compensation, just that they have underestimated, yet again, the amount that they would have to pay out. The pot will have more added to it and the banks will start complaining even more loudly that it is unfair that they have to pay money back to consumers, even though they ripped them off in the first place.
Which? has come to these conclusions by looking at the figures for claims in the first six months of 2012, the last period which the banks have released data for, and extrapolating the increase in claims that is estimated to have occurred since then, the average amount paid out in compensation and the money which has been set aside by the banks. Of course, when you look at it this way, it’s easy to see why the banks are now fighting for a deadline to be put in place, after which no claims will be processed.
Which? are arguing that the banks should not only not have a deadline put in place but should be contacting the customers who were mis-sold PPI themselves and encouraging them to make a claim. Of course, the banks don’t want to do this. They fought against having to pay compensation to customers at all, and then tried to stop third parties, often operating over the phone or through websites like http://www.ppiclaimco.com/ to make themselves more accessible, from helping customers pursue their claims.
The consumer group also argue that if the banks are worried about not having enough to pay the fees, they should take back the bonuses that were awarded to staff and executives who were responsible for the mis-selling and profited from hugely it.
It’s clear that the PPI scandal isn’t going to be over anytime soon, and billions have already been paid back to the people who were lied to or cheated out of their money by the banks. The next few weeks are set to be very interesting as the battle over whether a deadline will be set continues. The decision will not only affect the banks, but also the public’s perception of the FSA and how much influence the banks have over it.