Last week Lloyds increased the amount set aside for PPI claims to £4.3bn, and Royal Bank of Scotland is also expected to set aside more money when it reports its results this Friday. 

According to Which? the total for the five largest banks – HSBC, Lloyds, Barclays, RBS, and Santander, now stands at £8.8 billion.

Which? chief executive Peter Vicary-Smith said: “These latest figures from the banks show that PPI is now on course to become the biggest consumer financial scandal of all time, exceeding pensions mis-selling and the endowment mortgage scandal.

“The banks must make it straightforward for people to reclaim PPI themselves, for free, so they don’t resort to expensive and unnecessary claims management companies.

“We now need the Government to raise its game too, and toughen up the regulation of unscrupulous CMCs who are exploiting consumers who just want to claim back what is rightfully theirs.”