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Barclays customers to receive share of £1m for historic PPI breaches

Paloma Kubiak
Written By:
Paloma Kubiak

More than 1,000 Barclays mortgage customers are due to receive a share of £1m following a historic PPI (Payment Protection Insurance) breach which was only discovered last year.

The £1m – made up of refunds and goodwill payments – will be paid to up to 1,306 current and former mortgage PPI holders, though exact numbers of those affected aren’t known as Barclays is still investigating.

Under PPI rules, providers must send annual reminders to customers which set out the cost of their policy, the type of cover they have and it must include information about their right to cancel.

According to the Competition and Markets Authority (CMA), Barclays breached this rule between 2014 and 2017 by failing to send reminders to former customers who held a mortgage and associated PPI policy with the bank.

This is not the first time Barclays has breached this same PPI rule, but it is understood the latest omission happened when these customers moved house. Despite notifying Barclays of their new address, it “failed to act properly on this information” so reminders continued to be sent to old addresses.

This meant customers may have continued with their policies “for longer than they needed”, or prevented them from shopping around for cheaper or better alternatives “which may have cost them money”, the CMA said.

Barclays sold its mortgage PPI book in March 2017 but only discovered this breach in late 2021 following a review of its data. It notified the CMA of the breach in October 2021 as it is required to do under the PPI rules.

The CMA said it “is concerned both by the fact that this breach was ongoing between 2014 – 2017 and that it was only discovered in 2021”.

‘We won’t hesitate to take action’

Impacted customers are set to receive an average payment of £750 each “which is particularly important as the cost-of-living crisis bites”, Adam Land, senior director of remedies, business and financial analysis at the CMA, said.

He added: “Barclays will pay customers up to £1m after breaching the CMA’s PPI Order. We will now work with Barclays to ensure these payments are made to customers.

“It’s important that all PPI providers take notice – we won’t hesitate to take action, as we have done here, if customers have lost out.”

The CMA can’t currently impose financial penalties on businesses for breaches of this kind but has called for the power to do so.

It added it will not take further formal enforcement action in relation to this breach as Barclays is no longer the PPI provider and as it has taken several steps to fix the issue, including:

  • Writing to all affected policyholders, informing them of Barclays’ failure to send an annual review
  • Providing an up-to-date annual review statement, to cover the period between the date of the letter and the 12 months preceding it
  • Offering all affected customers a gesture of goodwill payment
  • Offer the vast majority of affected customers the opportunity to submit a claim for a full refund of premiums from the date of the first missed annual review.

‘We apologise’

Barclays confirmed to YourMoney.com that it will begin contacting all impacted customers before the end of 2022, to let them know what this means for them. Potentially affected customers will not need to actively get in touch with Barclays.

A Barclays spokesperson said: “Following a recent review, Barclays will be putting things right for a small number of current and former Mortgage PPI policyholders who did not receive annual review statements when they should have. We apologise to those impacted and for any inconvenience this may have caused.”

It was unable to share how many of the c. 1,306 impacted were current or former customers.