The UK’s largest banks are facing a potential bill of £25bn for mis-selling loan insurance, according to the Financial Conduct Authority (FCA). The FCA has proposed a deadline of spring 2018 for claims to be made, which could lead to a surge of last-minute applications. It is anticipated that the banks’ final PPI bill could reach £42bn, a significant increase on the current £26.7bn. The FCA’s proposal for a two-year public awareness campaign could further increase the final sum, as more consumers become aware of their right to claim. The FCA has also suggested additional rules to handle complaints, which would require banks to pay compensation even if customers have not lost out financially. The banks, however, have welcomed the proposal for a deadline, which would allow them to draw a line under the scandal. The British Bankers’ Association has stated that it will work with the FCA to ensure that the deadline is implemented effectively.
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