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UK banks' bill for mis-selling loans insurance hits 18 billion pounds
March 12, 2015 / 5:13 PM / 3 years ago

UK banks' bill for mis-selling loans insurance hits 18 billion pounds

LONDON (Reuters) - Britain’s banks and other lenders have paid out 18 billion pounds to compensate borrowers mis-sold payment protection insurance (PPI), after paying out 339 million pounds in December, the financial regulator said.

The bill for December was an increase on the 330 million pounds paid out by banks the previous month and higher than the 324 million paid in the same month the year before, according to data from the Financial Conduct Authority (FCA).

Banks such as Lloyds, RBS, Barclays and HSBC expect the bill to rise further and have set aside more than 24 billion pounds to compensate customers mis-sold payment protection insurance.

The policies were meant to protect borrowers in the event of sickness or unemployment but were often sold to those who would have been ineligible to claim.

The FCA said in January that it would consider imposing a deadline on customers claiming compensation, potentially drawing a line under the country’s costliest consumer finance scandal.

Reporting by Matt Scuffham; Editing by Greg Mahlich

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