The Financial Services Authority (FSA) has published data on the redress paid out by PPI providers and it reveals that £102m was refunded between May and June alone, after the banks’ legal challenge against the claims failed in court.
The figures, which reveal the total amounts of redress each month from January to June this year, show that 16 firms representing 92% of PPI complaints have paid out £215m between them.
The spike of £102m in May and June followed a major court case that found against the banking industry.
On April 20 this year, the high court rejected the legal challenge from the British Bankers’ Association’s (BBA) and Nemo Personal Finance against the FSA’s new PPI rules, which forced companies to redress customers where PPI had been mis-sold.
The challenge was made against the FSA and the Financial Ombudsman Service (FOS), but the high court dismissed the claim, thereby forcing banks to review their PPI cases and offer redress where necessary.
When the court case was lost, banks were forced to review thousands of cases and offer refunds, and the total paid out soared to £37m in May and then £65m in June.
The FSA said it was publishing the data in a bid to allow firms and consumers to keep track of progress on PPI redress.
Margaret Cole, interim managing director of the FSA’s conduct business unit, said: “The treatment of PPI complainants has left an indelible stain on the financial industry’s record. By releasing these figures we’re providing a useful measure of firms’ progress that can be tracked on an ongoing basis.
“While the amount of redress paid in May and June is unsurprisingly large in the wake of the judicial review, looking ahead we expect the amounts to vary somewhat as firms clear their backlogs while dealing with complaints as well.”
Cole added: “We remain 100 per cent committed to ensuring that where consumers were mis-sold PPI they will receive the appropriate redress from firms, and we are monitoring firms’ progress to ensure this is done properly.
"Where we find that this not to be the case, we are not afraid to take tough action.”
The FSA said it had launched new measures on PPI to ensure that customers are treated more fairly when complaining about the sale of a PPI policy.