The fund to pay Barclays PPI refund compensation have been increased to more than £5 billion following a £170 million addition to the fund in the last quarter.
The third quarter “Interim Management Statement” reveals that between July and September the company set aside a further £170 million for pay Barclays PPI refund compensation. The extra provision bring Barclays´ total fund up to £5.02 billion following a £900 million provision during the second quarter of the year.
The report also reveals that the company paid out £291 million in Barclays PPI refund compensation during the third quarter of the year. A comment alongside this figure in the report indicates that the bank is expecting a decrease in the number of customers claiming Barclays PPI refund compensation throughout the remainder of the year – which will also result in a reduction in handling costs.
Observers have noted a significant discrepancy between the £5.02 billion put aside to pay Barclays PPI refund compensation and the amount paid to date (£3.8 billion since January 2011). It would appear that there is more than £1.2 billion still available for customers to claim Barclays PPI refund compensation, and there are two possible explanations for this discrepancy:
The Financial Conduct Authority registered 278,426 complaints about Barclays during the first six months of the year – more complaints than for any other credit provider. 70% of the complaints related to Barclays PPI refund compensation – either because claims handlers at Barclays had unjustifiably rejected customers´ claims, or had underpaid settlements of PPI compensation.
There is also a significant number of complaints waiting to be investigated by the Financial Ombudsman Service about the way in which the bank has handled Barclays PPI refund compensation claims. Barclays was recently identified as one of four credit providers deliberately miscalculating PPI refunds by deliberating overlooking charges triggered by PPI premiums – in some cases reducing the amount of compensation due to customers by 50%.