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Banks dealing with huge PPI backlog three months after deadline

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Written by: Paloma Kubiak
29/11/2019
Banks are still dealing with a huge backlog of PPI claims following the August deadline, with one group admitting it could take until summer 2020 to respond to them all. If you've yet to hear from your provider, here's what you need to know.

The major banks were inundated with PPI claims and customer inquiries in the run-up to the 29 August deadline. Santander received over four million inquiries in August while Nationwide saw more than 60,000 inquiries and 5,000 complaints on deadline day alone.

Perhaps unsurprisingly, three months on they are still dealing with unprecedented volumes of submissions.

Royal Bank of Scotland, which includes NatWest, confirmed it may take until the summer of 2020 to clear the backlog and admitted it is “unable to provide a response to customers as quickly as they would like to”.

But it added “every effort” is being made to deal with complaints “as quickly as possible” and customers won’t lose out financially because of any delays. In total, RBS group has set aside £5.3bn for PPI compensation.

The Financial Ombudsman which provides customers with another avenue to complain about PPI, said it had received 31,000 new complaints in the three months to June. While it has yet to publish figures for the run up to the deadline, it is likely the ombudsman also received an influx of inquiries then.

Here’s what the other major banks told YourMoney.com about how they’re dealing with PPI claims:

Barclays

Barclays said it couldn’t disclose volumes of complaints or inquiries received. It added it is working to industry-set timelines for responses.

Its Q3 2019 results revealed it had set aside an additional £1.4bn for PPI redress, with a total provision standing at £11bn.

HSBC

It received an “unprecedented” volume of inquiries and complaints in the run up to the deadline and it is “working hard to resolve every case received as quickly as possible”. HSBC said that from 30 June, all PPI inquiries were automatically converted to a complaint if it was discovered the customer had taken out PPI.

The banking giant increased its PPI provision by £315m in the third quarter of 2019, taking the total to £4.7bn. However, £835m is yet to be paid out.

Lloyds

The banking group holds the lion’s share of PPI provision, totaling £21.8bn. It said it is working through cases as quickly as it can but its response time “may take longer than usual”.

It added that customers who submitted a complaint don’t need to take any action and it will be in touch as soon as it has an update on the case.

Nationwide

On the 29 August deadline day, Nationwide received more than 60,000 inquiries and 5,000 complaints. It continues to process these, stating that it’s responded to around 50% of inquiries that were outstanding when the deadline came into effect.

It said if customers submitted an inquiry before the deadline, it automatically turned it into a complaint if a PPI policy was sold.

Nationwide’s cumulative cost for PPI stands at £473m.

Santander

The bank received 4.1 million inquiries in August, with daily numbers climbing throughout the month. It said that by the end of this week, it will have processed all PPI inquiries received before the deadline.

Santander has set aside £2bn to cover PPI compensation claims.

Your PPI options post deadline

If you submitted a PPI claim ahead of the deadline and have yet to hear back from your provider, the message is not to worry. As above, some banks automatically turned PPI inquiries into complaints for customers if a PPI policy was found.

However, other banks weren’t so accommodating and technically if a complaint wasn’t raised ahead of the deadline, then customers would simply have missed the boat. But the ombudsman added that customers can bring their PPI complaint to it where it will look into whether to consider the complaint or not.

Further, if consumers missed the PPI deadline due to ‘exceptional circumstances’, the ombudsman says this should be raised with banks first. If the bank won’t accept the complaint, customers are invited to take their complaint to the ombudsman where it will try and help.

If you’ve already complained to a provider and you’re not happy with its response, you have six months to refer the complaint to the ombudsman.

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