July 15, 2015
The latest data released by the Financial Conduct Authority reveals that settlements of PPI compensation claims have increased by almost £100 million in 2015.
Ever since January 2011, the Financial Conduct Authority (FCA) has maintained a database of how much is refunded to the public in settlements of PPI compensation claims. The latest addition to the database reveals that in May £390.4 million was refunded to the public banks and other credit providers.
The settlements of PPI compensation claims paid in May brings the total amount PPI refunded to the public so far in 2015 to £1.985 billion – almost £100 million more than was paid during the first five months of 2014 (£1.886 billion) – and brings the total amount paid out in settlements of PPI compensation claims since the FCA started its database to more than £20 billion.
The year-on-year increase in settlements of PPI compensation claims implies that the volume of complaints about PPI is not declining as quickly as was forecast; although some of the increase could be attributable to the re-assessment of previously under-settled Lloyds PPI claims as ordered by the FCA, or a higher percentage of disputes being upheld in favour of the consumer by the Financial Ombudsman Service.
The Ombudsman is due to release its first half year report shortly. The report will give some insight into the reasons behind the increased value of settlements of PPI compensation claims and how many unresolved PPI cases still require investigation. In January this year, the Ombudsman acknowledged that there was a backlog of 280,000 PPI cases to be resolved and that new cases may take up to eighteen months to resolve because of their increasing complexity.
There was some good news regarding the PPI complaints procedure last week, when it was announced that the FCA had approved the Ombudsman´s application for certification under the “Alternative Dispute Resolution (ADR)” directive. Once the certification as an ADR takes effect in July 2017, the Ombudsman will have to resolve future PPI cases within a ninety day period.