Bank increases PPI provision to £3.6bn

Antonio Horta-Osorio

Twenty five percent of payment protection insurance (PPI) compensation claims submitted by firms were from people who didn’t have any Lloyds Bank products.

The bailed-out bank has increased its provision for mis-selling PPI by 12% to £3.6bn.

And Lloyds chief executive Antonio Horta-Osorio has hit out at fraudulent PPI claims, according to a report in The Guardian.

“We have to stop this,” he said. “It’s fraud.”

Horta-Osorio said the £375m additional provision was a “minor adjustment” and criticised the claims management firms that submitted 45% of the claims the bank received in February and March from customers who typically bought the insurance when taking out a loan as cover for illness and other hindrances to paying it back.

He didn’t rule out further increases to the PPI provision.

Barclays added £300m to its £1bn provision last week and the Royal Bank of Scotland is expected to increase its £1bn PPI provision on Friday.

In a separate report, it was revealed that the lawyers, accountants and businessmen behind the PPI claims industry stand to make as much as £2bn of the £8bn in compensation expected to be paid out by banks and credit card companies to individuals who have been mis-sold insurance.

The Ministry of Justice said that 897 firms had now been granted licences to offer PPI compensation services.

Since setting up a compliance team to investigate complaints against claims management companies, the MoJ has carried out 50 audits and issued 7 warnings.