Barclays to refund customers £750 each for PPI mistakes – see if you’re affected
BARCLAYS will refund some customers up to £750 each because of PPI mistakes.
Over a thousand people who banked with the firm will receive compensation after the regulator found they weren't given the right information.
The Competition and Markets Authority (CMA) found that Barclays failed to send Payment Protection Insurance (PPI) information to some mortgage holders.
PPI providers are required to send annual reminders to customers so that they are aware of their policy costs and type of cover.
Providers also need to set out clearly that customers have a right to cancel - and how to go about this.
But, the CMA found that Barclays failed to send reminders to up to 1,306 of its former Mortgage PPI policyholders between 2014 and 2017.
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The payout, of up to £1million, is made up of refunds and goodwill payments.
Barclays reported the breach to the CMA in October 2021, which it is required to do under the PPI order.
Adam Land, senior director of remedies, business and financial analysis at the CMA, said: "Barclays will pay customers up to £1 million after breaching the CMA's PPI Order.
"That’s an average payment of around £750 per customer, which is particularly important as the cost-of-living crisis bites.
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"We will now work with Barclays to ensure these payments are made to customers."
The CMA has confirmed that Barclays is already taking action.
Anyone affected will be contacted by Barclays with a goodwill payment
They will also be offered a refund on their premiums but will have to make a claim for it.
Barclays will contact affected customers with information on how to do this.
A Barclays spokesperson said: "Following a recent review, Barclays will be putting things right for a small number of current and former Mortgage PPI policyholders who did not receive Annual Review statements when they should have.
"We apologise to those impacted and for any inconvenience this may have caused."
Banks have forked out £38billion in compensation for mis-sold PPI in what has been one of the largest consumer redress schemes in British history.
The redress scheme ended in 2019 and further claims for mis-sold PPI can no longer be made to your bank or the Financial Ombudsman Service but law firms claim there is still a way that thousands of people could get money back.
Solicitors are taking claims to court on behalf of consumers based on a Plevin ruling that said banks should also repay commissions earned for selling the products.
And one Citibank customer successfully took the lender to the High Court for £7,954 after they discovered that commission made up 95.2 per cent of her policy's cost.
What is payment protection insurance?
You may have been sold PPI if you took out finance during the 1990s or the start of the 2000s.
It was an insurance policy that was attached to products such as loans, mortgages or credit cards.
PPI was meant to payout if the policyholder fell ill, had an accident or lost their job.
It took lots of different names such as:
- Accident, sickness and unemployment insurance (ASU)
- Account cover
- Credit insurance
- Credit protection
- Loan care
- Loan insurance
- Loan protection
- Loan repayment insurance
- Mortgage payment protection insurance (MPPI)
- Payment cover
- Protection plan
How was PPI mis-sold?
Consumer groups started questioning the sales practices of banks and building societies around 2005 after it was found that many borrowers were unaware that they had been sold policies.
Some were also unable to claim despite paying for the insurance such as if they were self-employed or retired.
Another issue was that staff were incentivised to sell PPI with high commissions, which meant a lot of policies were mis-sold.
PPI sales were banned in 2009 and lenders were ordered to consider all complaints in 2011.
The FCA set a deadline for complaints in 2017 that said all redress should be considered by the end of August 2019.
Can you claim a PPI refund?
The PPI claims deadline has passed.
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Borrowers had until August 29 2019 to make a claim from their bank or through the Financial Ombudsman Service for mis-sold PPI.
But as is the case of Barclays this week, customers may later find out they're owed redress after their original PPI provider reports any breaches to the CMA.