PPI Provisions at Lloyds Rise to Reach £8bn

Lloyds TSB is to set aside a further £750 million to compensate customers who were mis-sold PPI it was announced this week. The total amount set aside by the banking giant now stands at £8 billion, the largest provision made by any British bank. Barclays bank meanwhile has this week confirmed that their PPI provisions will remain unchanged at £3.95 billion while announcing an increase in their nine-month pre-tax profits to £2.85 billion. 

Despite the increase in provisions, Lloyds have reported a fall in average weekly complaints from 12,500 per week during the second quarter down to around 11,000 a week during the third quarter of the year, however they noted that complaints have fallen slower than initially projected.

Chief Executive at Lloyds bank, Anthony Horta-Osorio commented “We are well on our way to becoming a better, simpler, low-risk bank, which delivers the products our customers need and the strong performance and sustainable returns our shareholders expect”

Of course the increase in provisions at Lloyds is welcome news which we hope will help the bank work towards refunding the many people who remain out of pocket as a result of Lloyds bank’s mis-selling. However there are still concerns over uphold rates at the Financial Ombudsman Service (FOS) which remain high. On average, during the 6 months between January and June this year the FOS upheld 75% of complaints regarding PPI in favour of the customer and Lloyds’ individual uphold rate during the same period was one of the highest at 90%.

The uphold rates at the FOS have previously been described as “outrageous” and “unacceptable” by Financial Conduct Authority (FCA) chief executive Martin Wheatley, and prove that banks are still failing to treat customers fairly in refunding what is rightfully theirs. In spite of this, the British Bankers Association (BBA) continues to lobby for the enforcement of a time limit on PPI compensation, however has yet to achieve any momentum in their bid to end PPI pay-outs for customers.

The FOS has to date received over one million complaints relating to PPI and while we are pleased to see customers and Claims Management Companies (CMC) taking a proactive approach in escalating their complaints to the Ombudsman, it equally gives an indication into the number of complaints which are being initially rejected by banks. As a CMC specialising in reclaiming mis-sold PPI on behalf of our customers, we hope to see banks dealing with complaints at source, helping customers avoid lengthy timescales in resolving complaints and making the process easier for customers to reclaim what is rightfully theirs.