Banks 'face huge staff costs' over PPI

11 May 2011

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