The British Bankers’ Association and the Financial Services Authority are said to be having talks over the possibility of establishing a PPI claims deadline. With claims repayments for November 2011 alone totalling £411 million, many banks are eager to wrap repayments up by next summer.
Reuters has been told that the Financial Services Authority (FSA) may be considering a deadline for payment protection insurance (PPI) claims in the UK, at the request of the British Bankers’ Association (BBA).
The FSA is quoting PPI claim payouts for November of 2012 as being at £411 million, bringing the total payouts since January 2011 to £8.05 billion.
With claims that the Financial Ombudsman Service (FOS) expects to settle over three times as many PPI cases in 2013 than in 2012, the forecast figures for 2013’s PPI payouts are quickly rising.
Many banks have set aside large sums, with a combined total of over £12 billion. With this money tied up for future PPI repayments, the amount of money banks can lend in real terms has been depleted.
The BBA has suggested that the claims deadline be set for next summer, in hopes that banks can resolve PPI claims quickly, freeing up their resources to focus on investment and other endeavours.
As talks are in early stages, the FSA will have to consult on any new claims rules; but it is currently unclear as to if the PPI deadline would require any new legislation to be put into order.
Speaking on the matter, an FSA spokesman said: “As you would expect for an issue of this scale and complexity, we have considered a number of options and continue to do so. PPI is an ongoing and high-profile issue and we are monitoring it closely.”
While the possibility of a PPI claims deadline is still uncertain, there has been significant progress in the processing of claims over the past year. Early forecasts have estimated the UK economy will see over a £6 billion boost in 2013, due to PPI claims repayments.
- Previously: PPI repayments to boost economy.