The total amount of redress paid out for mis sold payment protection insurance policies has reached £5.4bn from January 2011 to June 2012, the Financial Services Authority (FSA) has revealed, with lenders paying out £614.8m in June alone.
According to the FSA, the figures come from 24 firms which are accountable for 96 per cent of all PPI claims. These figures have increased from 16 firms which made up 92 per cent of PPI claims, suggesting a rise in the number of firms involved in the PPI mis selling scandal.
The financial regulator expects this figure to continue to rise despite a crackdown on claims management companies (CMCs).
From April 2013, the Legal Ombudsman will take responsibility for complaints about CMCs. This means any CMC which provides a poor service to customers could be made to pay compensation.
Kevin Rousell is the Head of Claims Management Regulation:
“This reform is a win for consumers and provides yet another tool to help stamp out malpractice in the industry. Our Claims Management Regulation Unit will continue to target those CMCs who do not comply and we will work in partnership with the Legal Ombudsman to root out those CMCs who take advantage of customers.”