Lloyds Banking Group has once again increased its Payment Protection Insurance (PPI) provisions after the Financial Conduct Authority (FCA) announced a deadline on all new claims for August 2019.
Confirming the increase in a regulatory filing, the bank announced a further £350m set aside to deal with PPI complaints including taking on more staff to deal with the rise in cases.
Bank officials will be disappointed at the news with Lloyds’ Chief Financial Officer having previously stated back in October that a £1bn provision was “the last big PPI provision that we would expect to take”.
It brings the total amount set aside by Lloyds up to more than £17.3bn for the mis-selling scandal, making them the biggest contributor with more than twice as much as the next biggest offender Barclays.
In its statement the group confirmed that as well as the expected rise in number of complaints it also anticipated an increase in the size of compensation payouts.
It said: “The additional provision has been taken to reflect the estimated impact of the policy statement including the revised arrangements for Plevin cases, which includes a requirement to pro-actively contact customers who have previously had their complaints defended.”
Plevin is a legal case which the FCA has decided sets a precedent for any PPI policies involving undisclosed high levels of commission. From this August such cases where levels of commission were above 50%, and the customer was not informed of this, will now include grounds for compensation even if the complaint has previously been rejected.
In total over £26.2bn has been paid out to those who were mis-sold PPI by the UK’s major banks, with almost 15% of that paid out last year.