"Many Photos" - Lloyds bank gets 190,000 PPI claims every week ahead of August 29 deadline

Nearly 200,000 customers a week are bombarding Britain’s largest bank with PPI compensation requests ahead of its claims deadline.

With only a month remaining, Lloyds said that it is being contacted by 190,000 people a week – 120,000 above average.

Other banks are also thought to have been inundated with requests amid a scramble for payouts.

Lloyds set aside another £550million to pay victims of the country’s biggest ever banking scandal in the second quarter of this year – meaning the debacle has now cost it a staggering £20billion.

Lloyds said that it is being contacted by 190,000 people a week – 120,000 above average - ahead of the August 29 claim deadline 

For the industry, the PPI bill stands at £35.7billion, enough to pay Britain’s entire annual public order and safety budget. Victims of the disaster must claim by August 29.

Lloyds – which is Britain’s biggest High Street bank with 22million current account customers – said the surge had taken it by surprise, pushing down profits.

Around 10 per cent of its 190,000 weekly requests for information are expected to lead to official claims.

Other major names are expected to set aside millions to deal with the cut-off rush. 

Many claims will be genuine as the PPI scandal saddled huge numbers with unnecessary bills. But other customers appear to be trying their luck, egged on by unscrupulous claims management firms.

Martyn James, of consumer rights group Resolver, said: ‘PPI was the biggest financial mis-selling scandal of all time. It won’t just be Lloyds – expect further big-money announcements from the other banking groups too.

‘Even though these numbers are extraordinary, there are still going to be millions of people who are owed money not put in a claim.’ As many as 64million people were sold PPI policies, mostly between 1990 and 2010. 

The product was designed to cover repayments on loans and credit cards if a borrower was made redundant or unable to work. 

For the industry, the PPI bill stands at £35.7billion, enough to pay Britain’s entire annual public order and safety budget (PPI form stock image)

Many customers had no idea what they were buying or how much it cost. Many borrowers, for example those who were self-employed, could not even use the product to claim.

Banks quickly realised that PPI was a huge money-spinner and set their staff massive sales targets.

Martyn James, of consumer rights group Resolver (pictured), said: ‘PPI was the biggest financial mis-selling scandal of all time. It won’t just be Lloyds – expect further big-money announcements from the other banking groups too'

When the extent of the scandal became clear, they fought in the courts to avoid offering compensation but lost a landmark case in 2011 – opening the floodgates.

In 2017, the Financial Conduct Authority watchdog imposed the August cut-off date for claims to try and bring the saga to a close. 

At Lloyds, the PPI charge has driven profits down to £2.9billion for the first six months of 2019 – 7 per cent lower than 2018. 

George Culmer, chief financial officer, said: ‘We were always in favour of a time bar, partly because we knew it would encourage customers to make contact. The speed at which that’s happening has caught us by surprise.’

Mr Culmer added that the lender may yet have to set aside more money, although Lloyds is hopeful its costs will be covered.

Lloyds estimates it has sold 16million PPI policies since 2000, including both legitimate and toxic ones, adding that just 54 per cent of these have since been dealt with.

Barclays, Royal Bank of Scotland and HSBC all reveal their results in days. Ian Gordon, at Investec, said that if their experiences match Lloyds’ the PPI bill could rise by £700million.

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News Photo Lloyds bank gets 190,000 PPI claims every week ahead of August 29 deadline
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