The PPI scandal has forced many of the country’s banks to incur large financial losses. A recent report found that the banks have already needed to pay more than £18 billion to compensate customers for the claims that they have filed. Some experts feel that the costs will increase much more in the near future.
Estimates of Financial Costs of PPI Claims
The PPI crisis has already turned out to be the largest financial disaster in history. Many people expected that it would have subsided by now, but that doesn’t seem to be the case. Approximately 15,000 people have been filing new claims every week over the past several months. The number seems to be growing year after year without any sign of slowing down.
Many financial experts are wondering how much the cost of PPI will be by the time everything is finally resolved. Some believe that the cost of the crisis will be at least twice what it is already. They are using a PPI claims calculator to determine the final cost of the mis-sellings.
Banks Setting Aside Record Amounts
The banks seem to believe that far more people are going to file claims in the near future. Barclays said that it will need at least another £1.3 billion to cover future claims. The bank has already paid approximately £17 billion to cover the claims that have been filed. Some of the banks analysts believe that Barclays will need to set aside at least another £3 billion to cover future PPI claims.
Barclays was one of the largest players in the PPI scandal. However, other banks may owe even more for mis-sold PPI claims. Lloyds has recently set aside PPI provisions of nearly £7 billion. Those provisions are expected to be used up by the end of this year. The bank is asking for another couple billion to cover claims that will be filed after January.
More PPI Claims Expected to Follow
Many more customers are expected to file claims in the near future. Over 50 million customers have purchased PPI products over the last twenty years. A substantial percentage of these customers were misled into believing that they needed the insurance or didn’t realize they were even purchasing it.
Experts believe that only a third of the customers who were duped have filed claims so far. The number of claims filed isn’t expected to drop anytime in the near future.