LONDON (Reuters) - Britain’s government needs to limit compensation paid to customers mis-sold loan insurance, John Cridland, director-general of the Confederation of British Industry, wrote in the Times on Monday.
The head of Britain’s biggest business lobby group wants the government to introduce a legal time limit on claims for payment protection insurance compensation.
“PPI mis-selling is seen as a huge scandal that should never have happened. and it is right that consumers are able to get swift and proper redress,” Cridland wrote.
“Banks are sending out tens of thousands of compensation payments and cheques, and there is a real sense that the ball is now firmly in the court of ambulance-chasing, claims-management companies,” he wrote.
The biggest retail banks in Britain face multi-billion pound losses to cover wrongly sold insurance on mortgages and other loans, often to people whose circumstances meant they were barred from making claims on the policies.
The PPI scandal is the latest instance of British banks being found to have mis-sold products, a list that includes the sale of specialist financial products known as swaps to small business, some of whom were left with big losses rather than the protection against interest rate moves they expected.
Reporting by Stephen Mangan