Banks Cease Talks on PPI Deadline

Banks have ceased talks on agreeing a Payment Protection Insurance (PPI) deadline with regulatory body the Financial Conduct Authority (FCA), after it was reported this month that the industry was once again lobbying for a cut-off date for claims.

It was reported that banks were pushing for a PPI deadline which would be implemented after an advertising campaign over the mis-selling scandal to raise awareness and maximise customer refunds.

The FCA said that they would not rule out the possibility of a deadline, however would only approve the plans if banks could guarantee quick refunds for all legitimate claims, described by FCA chairman, John Griffiths-Jones as a “high hurdle”.

According to reports from Sky News, banks have now terminated discussions over the potential cut-off date, which would put an end to future claims and compensation. This means that the PPI scandal and pay outs are anticipated to last for many years to come as banks continue to set aside billions of pounds for those people who were mis-led into paying their bank or lender for the insurance product.

In January this year Lloyds banking group set aside a further £1.8 billion to compensate victims of the mis-selling scandal, taking the total amount set aside by the ‘big four’ banks to just under £20 billion. 

Meanwhile, Chief executive at Lloyds, Antonio Horta-Osorio is set to receive a bonus worth £1.7 million. The bank’s overall bonus pool went up from £365 million last year to £395 million this year, despite the bank cutting 35,000 jobs following its government bailout. Commenting on the news, Unite national officer Rob Macgregor said:

“The chief executive’s £1.7 million bonus, on top of shares worth millions awarded at the end of October is a kick in the teeth to the taxpayer.”

Horta-Osorio has hit back at critics, defending his personal bonus and a £30 million boost to the Lloyds bonus pool, arguing that the bonuses link directly to the performance of staff and the bank:

 "I strongly believe you should link compensation with performance, and having increased our underlying profits by 140%, we thought it was appropriate to increase the bonus pool of the bank by 8%.

Hard work at any company or business should of course be rewarded, but it comes as no surprise that the scale of bonus planned for the chief executive of Lloyds has been met with scrutiny.

Antony Jenkins, CEO of Barclays bank, for instance has waived his bonus believed to be worth up to £2.75 million, stating that accepting the bonus “would not be right” due to costs incurred by the bank. Perhaps the principle of surrendering a substantial bonus is worth considering for the chief executive of Lloyds and many other banks whose customers continue to wait for resolutions on an unprecedented number of outstanding PPI complaints