The leading web resource for financial technology

Banks 'face huge staff costs' over PPI

11 May 2011

email this aricle - Banks 'face huge staff costs' over PPI - 11 May 2011 print this article - Banks 'face huge staff costs' over PPI - 11 May 2011
Banks 'face huge staff costs' over PPI
Banks in the UK are likely to face considerable staffing costs as they attempt to compensate customers who were mis-sold payment protection insurance (PPI).

The Guardian reports that the larger high-street lenders are looking to employ around 6,000 people to help address the millions of complaints they face over the issue.

It noted the organisations could be set to use temporary offices in order to base the extra employees, while they have also disclosed that they could encounter bills totalling £5 billion ($8.2 billion) before the episode is over.

Despite none of the banks - Lloyds Banking Group, HSBC, Barclays and Royal Bank of Scotland - making their staffing requirements public, industry analysts predict they will be considerable.

A spokesman from Lloyds said: "We are already using third parties and internal resources to deal with PPI complaints."

The Daily Mirror recently reported that experts have warned the dispute over PPI could result in banks attempting to recoup their losses at the expense of their customers.

By Asim Shah

Comments (1)

GB anthony brennan says:
May 12, 2011 06:50 GMT
It should be noted that Judicial review was not about PPI claims. The dispute was about a set of best practises that the FSA introduced in December 2010 and whether they could be applied retrospectively. The instructions from the FSA were that banks should justify why they had sold PPI and if they could not created the obligation to inform their customer of a “potential claim”.

For the customer to recover this money they still need to establish a basis of claim ie on what legal grounds they believe they should receive their money back, they need to establish the type of claim ie termination or rescission of the PPI contract and quantify their claim.
Add your comment - Max 1000 characters used
More news