Up to 500 jobs could be axed by Firstsource, Barclaycard’s official processor of missold PPI claims. Whilst it is expected that 150 staff will stay on at Middlesbrough, a great number of the personnel working in Thornaby are set to lose their jobs. The decline in work was predicted, largely because the backlog of claims has now been processed. Around 600 new employees were taken on in May as the missold PPI scandal continued to gain steam, with new workers helping to deal with the stack of outstanding claims and paperwork. However, the majority of this has now been handled, and new claims coming in against Barclaycard have fallen.

Karen Breslin explained, “They haven’t got enough work, we saw it coming. The work has been reducing; the new work wasn’t coming in.”

Despite the falling claims figures for Barclaycard, many other financial institutions and providers are still seeing claim rates soar as more people become aware of the scandal and seek to get recompense. However, with a lot of the backlog now dealt with, job opportunities in this sector could fall regardless of the number of new claims that are noted.

PPI was missold to many people when taking out credit agreements such as personal finance or mortgages. However, credit card companies were also able to sell the product to help consumers protect their debt should they lose their job and be unable to make payments. However, in a similar way to the misselling by financial institutions, PPI was also subject to being falsely sold in the credit card market, with numerous consumers ending up with insurance that they could not use.

Owned by Bank of America, MBNA has now put aside a substantial missold PPI liability fund in preparation for the large amount of complaints that are likely to come its way. An official statement released by the company said, “The group has provided against future complaints. However, there remain a number of uncertainties including customer complaint volumes and redress levels. All assumptions are continually assessed and the provision recorded represents the current estimated cost to the group, subject to these uncertainties. This provision was increased by £175m during the year”.

The move is likely to highlight that the misselling scandal has not only occurred with banks and building societies, but credit companies and other financial service providers too. As a result, consumers should not only check their credit agreements with banks, but their credit card contracts too.

Whilst Lloyds chief executive, Mr Horta-Osorio, explained that paying out a dividend would attract investors and help the bank regain its feet, the FSA has made moves to block such a payout. This is because Lloyds has been heavily involved in the missold PPI scandal. The FSA also wants the taxpayer-backed institution to put aside funds for future financial shocks, which could include the breakup of the eurozone.

It is reported that Lloyds wanted to make payments in 2014, using the earnings created in 2013. However, the bank has already been pushed to a £439m loss in the first six months of 2012 because £700m had to be set aside for missold PPI liability costs. Credit Suisse has estimated a £800m pre-tax profit for the year, with shares expected to cost 37.8p.

Many people are still going through the process of claiming their missold PPI compensation, and moves by a taxpayer-backed bank to start paying dividends to investors could well anger many individuals. It is still uncertain whether the FSA would block the move, but experts have urged restraint on payout dividends too early.

PPI is a product that covers financial commitments, and if people lose their jobs or are unable to work, insurers will pay out to meet mortgage repayments, loan costs or other ongoing credit agreements that need honouring. This can be an essential way of protecting a family against unforeseen future problems. In the same way that taking out PPI was protecting a family, making a claim against missold PPI is also important as it can reclaim vital funds.

The average payout for a missold PPI is nearing £3,000, and this makes submitting a claim financially rewarding. In some cases, the compensation may be offset against an existing loan, helping families to reduce their monthly repayment expenses. If no loans are held, then payment may be provided as a cash sum, providing individuals with a surprising nest egg that could be used for whatever they wish.

Making a PPI claim is important for anyone who knows that he or she has been missold a product and wants to gain financial remuneration. Just as taking out the insurance product in the first place was an important step in protecting a family, so too is making a claim and gaining compensation.

In 2012, the first half of the year saw 2.5m complaints against protection and general insurance, a rise of 99 per cent. PPI contributed to a staggering 2.2m of these claims, showing a 129 per cent rise on the data that had been seen for the second half of 2011. Meanwhile, overall figures for complaints came in at 3.5m, with statistics revealed that the financial industry bore the brunt of the numbers, with a total of 2.7m complaints.

With the numbers of missold PPI claims still soaring, it is believed that complaints figures will continue to gain, with the financial industry remaining one of the main contributors. Talking of the increase in complaints, a British Bankers’ Association spokesman said: “The total number of banking complaints showed a year-on-year increase of three per cent, and we will investigate these figures carefully. Banks have increased their resources significantly to handle PPI complaints without delay to ensure that decisions are made as swiftly as possible.”

For consumers still considering undertaking the missold PPI claim process, experts urge individuals to take the time and trouble to ask for compensation. With the average remuneration nearing £3,000, a healthy nest egg can result in making a claim. By putting in a claim, all individuals can do their part to ensure that such a scandal never occurs again.

The missold PPI scandal continues to rock the country, and thousands of people are currently going through the process of claiming back compensation. The Financial Services Authority (FSA) has recently called for banks to ban commission based product sales in an effort to avoid future misselling incidents. It seems that the Co-operative Bank has taken note.

From now on, the bank is scrapping the quarterly goals of pushing sales upon consumers and it will instead reward employees for offering good customer service. It is the first service-based commission of its kind in Britain, and one that the company hope will lead to renewed customer confidence and an overall better business model.

The Co-operative Bank’s sales targets previously accounted towards five per cent of the quarterly bonus. The new bonus now rewards staff with between 10 and 20 per cent of their salary, making the push on good customer service rewarding. Moreover, with many consumers across the country still angry about the missold PPI scandal, the Co-operative Bank’s move may just attract positive attention for those customers wanting new financial services.

In the first six months of 2012, PPI claims have reached 2.2 million, a number that is a staggering 129 per cent rise on the half year that came previously. With the rise in claims, it is expected that the liability funds put aside by the financial industry to make compensation payments is running out swiftly, with more money needed immediately. This needs to be put aside now so that an extreme cash flow crisis doesn’t occur, leaving many consumers waiting long periods before they receive their cheques.

In addition to calling for more money to be made available to consumers, Which? is asking for PPI policies to become far more transparent than they ever have been. The body is calling for financial institutions to make monthly updates publicly available so that consumers can see just how much has been paid back to people who have been missold PPI. There were also continued calls to claw back bonuses paid out to top executives and use this money to repay money to customers who have effectively been conned out of their hard-earned cash and are waiting for compensation.

In the new data by the FSA, it was shown that around 19,550 new complaints were handled every day for the first half of 2012, with 62 per cent relating directly to missold PPI. This rise in PPI complaints has led from the increased media spotlight surrounding the issue, with people up and down the country now being aware that they may have been sold the wrong insurance. PPI is used to protect people’s repayments on agreements, such as mortgages and loans, should they lose their job or become unable to work. However, in many cases, the insurance that was actually purchased is not the correct product for the situation, resulting in many people being never able to make a claim.

Which? chief executive, Peter Vicary-Smith, revealed that missold PPI is now the largest financial scandal ever to occur. “The banks must set aside more money for PPI claims and make it easier for customers to get back what they are rightly owed, without any hassle,” he added. With many people still to make claims for wrongly sold PPI, it is expected that complaints against the banking sector are still to rise further.

It was originally estimated that 2012 would note around 165,000 cases for missold PPI. However, this figure is set to be easily surpassed as an increasing number of people realise that they have been wrongly sold insurance products and submit claims to receive compensation. Whilst banks are still doing a lot to get compensation paid directly, many claims continue to be referred to the FOS for final settlement. The majority of these are still being found in the customers favour, offering lucrative compensation to consumers but increasing the period in which they have to wait for their money.

Due to the extending periods of time that many people have to wait, submitting a missold PPI claim as quick as possible is advised. Whilst banks have been set an eight-week turnaround target by the Financial Services Authority (FSA), referrals to the FOS can take far longer to deal with. For those who want to try and get their compensation by the time that Christmas arrives, putting in a claims form immediately will be crucial.

In a speech regarding the missold PPI scandal and commission based selling in the financial industry, Mr Wheatley warned banks that there was only a year and a half in which they had to stamp out staff incentives to make sales. “If we think in a year to 18 months’ time the industry has not cleaned up its act, then we will revisit it in a much more intrusive way. The question is how intrusive we need to be,” Mr Wheatley said.

Talking about the ways in which products are sold, Mr Wheatley explained that some incentives often resulted in the misselling to consumers. Ordinary customers walking into banks are often plagued with questions and sales talk to try to get them to buy more products, and it is here that items, such as PPI, are often wrongly sold to consumers.

Whilst the face of the industry may be changing, thousands of people are still to make claims for PPI that has already been sold. In addition, by taking advantage of the current media spotlight on the industry, consumers could be set to receive a nice nest egg in compensation.