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PPI provisions rise above £6bn

It has been revealed that the total sum set aside to pay for Payment Protection Insurance (PPI) compensation has now risen above the £6bn mark. With a sharp rise in the number of complaints being received in the past few weeks, three of Britain’s leading banks are set to increase their provisions, creating even more of a furore over the missold PPI scandal.

In recent weeks, it was reported that Barclays were set to raise their PPI liability because of a surge of PPI complaints. Now it has been revealed that the rise is approximately £300m, with Royal Bank of Scotland reportedly preparing to increase their current £950m pot by about the same. Meanwhile, though HSBC has already increased its PPI provision from £270m to £400m this year, it has not ruled out having to make further adjustments as the month’s progress.

Many thousands of consumers that are currently seeking compensation will welcome the news. After a tribunal in April 2011, it was ruled that those who are victims of missold PPI are entitled to full repayment of their premiums with an additional eight per cent compensation on top. This had led to vast sums of money having to put aside by financial institutions to allow payments to be made. For those still chasing their entitlement, news that provisions have been increased will be a welcome sign that the industry is preparing to pay out.