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Nationwide sets aside $161m for PPI claims

A major British financier has set aside some £103 million ($161 million) to deal with payment protection insurance (PPI) mis-selling claims, it has emerged.

In its Preliminary Results Announcement for the 2011-12 financial year released yesterday (23 May), Nationwide announced it has drawn up this nine-figure budget for this legal process as claims continue to soar in volume.

According to the lender, the number of PPI claims being made increased by around 400 per cent in the second half of the last fiscal period, meaning it has had to increase the funds it has available to pay damages.

Chief executive Graham Beale cited the aggressive stance of claims management companies, which is causing them to drive complaints that eventually turn out to be false.

With this in mind, Mr Beale called on the government to tighten up its rules regarding PPI claims.

"These false claims are undermining the process of dealing with the real claims and certainly incurring a high level of delay in the process and unnecessary costs so it does need to be addressed," he added.

By Gary Cooper