5th Jun 2014 13:50
LONDON (Alliance News) - A number of the UK's high street banks may have underpaid compensation due to certain customers over the payment protection insurance mis-selling scandal, the BBC reported on Thursday.
According to an expert commissioned by the BBC, the shortfall could be somewhere in the region of GBP1 billion.
Customers potentially affected had PPI on credit cards issued by Lloyds Banking Group PLC, Barclays PLC, MBNA and Capital One, the BBC said, with all claiming to make "every effort" to pay the correct amount of compensation.
That said, the BBC said the extent of the shortfall is "difficult to assess."
The BBC said that the Financial Conduct Authority, the industry's regulator, is already discussing the issue with the banks involved.
According to the BBC's report, the compensation shortfall is due to a failure by banks to correctly refund additional charges triggered by the premiums of mis-sold PPI policies. A number of people were put over their borrowing limits due to some of those premiums, meaning they were charges an additional fee. Nevertheless, the banks have refunded the premiums on mis-sold PPI policies plus interest. The shortfall is due to the failure to include additional fees and charges.
In a statement to the BBC, Lloyds Banking Group said, "When a customer lets us know that they may have incurred other costs because of their PPI policy, we will investigate and make an appropriate refund."
The BBC said that a Barclays spokesperson said that the bank's current and historic methodologies have been assured as compliant with regulations.
"In the case of late and over limit fees, where it is possible to identify that fees have been triggered by the customer taking PPI, we have already repaid them and in recognition that we may not have been able to identify all fees, we have paid additional interest to more than mitigate any customer detriment," a spokesperson told the BBC.
http://www.bbc.co.uk/news/business-27679311
By Samuel Agini; [email protected]; @samuelagini
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