Barclays will pay compensation over PPI claims

| June 13, 2011 | 0 Comments

Banking giant Barclays has today announced it will pay compensation to customers who were mis-sold payment protection insurance (PPI).

The bank said it will reimburse those who made a complaint before 20 April the total value of all premiums plus 8% interest.

It highlighted that it was the first bank to pay out PPI compensation on a “no-quibble” basis.

In a statement, the bank said: “We can confirm that we are contacting customers whose complaint was put on hold on or before 20 April with an offer to settle their complaint in full as a gesture of goodwill.”

It is hoped that other banks will follow suit.

The move from Barclays comes after banks lost a court challenge over claims they mis-sold the insurance.

The controversial insurance has been a hot topic for some time now and the Financial Services Authority (FSA) introduced a review of the insurance after millions of policies were mis-sold and thousands of complaints were received.

Under a PPI policy, an agreed sum of money is paid out each month to fully cover, or cover a percentage of the payment due on your mortgage or loan if you are unable to work, as a result of becoming unemployed or sick.

It was established last year that financial providers commonly boosted their profits by incorporating the cost of a one-off PPI premium into a loan.

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