Mis-selling claims against UK banks 'will take years to resolve'

5 March 2013

Banks in the UK are likely to have to deal with payment protection insurance (PPI) mis-selling claims for years to come.

That is according to Natalie Ceeney, head of the Financial Ombudsman Service, who believes there is no end in sight for financiers having to outlay compensation to disgruntled consumers.

Recently, the British banking industry called for a deadline for around next summer to be set - by which all claims related to PPI would need to have been lodged - in order to ensure this process does not rumble on.

However, during an interview with Reuters, Ms Ceeney indicated this plan will probably not go ahead as the number of claims being made has reached a "staggeringly high level" in recent times.

"The scale of the current volume has taken everyone by surprise … we're assuming that this is a multi-year challenge," the official added.

So far, lenders have collectively set aside around £14 billion ($21.2 billion) for these payments, but sources in the sector told the news source the total cost could reach around £25 billion.

By Claire Archer

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