Barclays has pledged to pay compensation to all payment protection insurance customers who made a complaint before April 20. Customers will be repaid all their premiums and 8 per cent interest in a move the bank says will help tens of thousands of complainants.
A number of firms placed PPI complaints on hold after the British Bankers’ Association launched a judicial review into the FSA’s PPI complaint-handling measures last October. The FSA won the case in May.
In the same month, Barclays set aside £1bn to cover the cost of compensation. Lloyds Banking Group set aside £3.2bn while RBS set aside £850m and HSBC £269m.
Barclays had previously said it would review all complaints on merit after the automatic reimbursement cut-off date of April 20. A spokesman says: “We can confirm that we are contacting customers whose complaint was put on hold on or before April 20 with an offer to settle their complaint in full as a gesture of goodwill.”
Which? chief executive Peter Vicary-Smith says: “It is fantastic to see Barclays stepping up in this way, acknowledging its mistakes and refunding customers what they are owed, no questions asked.
“Hopefully this will have a domino effect and other banks will follow suit. The sooner the banking industry can consign the PPI misselling scandal to the history books, the better.”
Highclere Financial Services managing director partner Alan Lakey says: “I am glad that Barclays has decided to bite the bullet but it will be paying some who do not deserve it and have chanced their arm. It will be tough for other banks not to follow suit.”