View more on these topics

FOS: Banks’ PPI payouts ‘nowhere near’ profits

Natalie Ceeney

The Financial Ombudsman Service says compensation payouts for payment protection insurance are “nowhere near” the profits banks made from the product.

Speaking to the Parliamentary Commission on Banking Standards last week, FOS chief executive Natalie Ceeney said banks made far more money from the products than they are paying back in redress.

The current total amount set aside by banks stands at around £12bn but some have predicted it could rise to as much as £25bn.

Last month, the FSA said it was in talks with the British Bankers’ Association about imposing an April 2014 deadline on PPI claims.

Ceeney said: “Even the redress that has been repaid so far does not come anywhere near the profits made over PPI.

“It is certainly true that if they tackled this earlier the bill would be far lower, without doubt. One of the disappointing factors for us is that this has been a long period of prevarication where they thought that if they could kick it into the long grass it would go away. Unfortunately there is now a big bill that needs to be repaid.”

Lord Andrew Turnbull said banks’ own ”idiocy” stopped earlier payouts, while Labour MP Pat McFadden slammed the “ludicrous” timescale for PPI compensation.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com