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Santander sets aside £21m for PPI commission claims

Paloma Kubiak
Written By:
Paloma Kubiak
Posted:
Updated:
02/03/2022

Santander has set aside £21m to cover compensation claims relating to undisclosed PPI commission (Plevin) cases.

The lender confirmed that as at 31 December 2021, there was no provision remaining for PPI redress and related costs – compared to £59m in 2020.

However, while the deadline for bringing PPI complaints has passed, customers can still make PPI (Plevin) complaints.

This entitles people to compensation in relation to the commission element of PPI, particularly where it wasn’t disclosed or made clear at the time of buying the policy. Further, this is allowed even where a customer was not mis-sold the original PPI policy.

As part of Santander’s annual results for the twelve months ended 31 December 2021, it stated: “An increase in provision of £21m has been made for the best estimate of any obligation to pay compensation in respect of current stock and estimated future claims. There are ongoing factual issues to be resolved regarding such litigation which may have legal consequences including the volume and quality of future litigation claims. As a result, the extent of the potential liability and amount of any compensation to be paid remains uncertain.”

As part of its litigation and other regulatory charges, it disclosed a £6m estimate to cover a historical issue relating to compliance with the Consumer Credit Act.

“This provision has been based on detailed reviews of relevant systems related to consumer credit business operations, supported by external legal and regulatory advice. The Customer remediation provision [£6m] includes our best estimate of Santander UK’s liability for the specific issue.”

However, it added: “The actual cost of customer compensation could differ from the amount provided. It is not practicable to provide an estimate of the risk and amount of any further financial impact.”

Santander confirmed there were charges of £29m for legal provisions and £22m for other regulatory issues.

And its annual results also revealed that in 2021, there were charges for operational risk provisions of £94m, including Authorised Push Payment fraud losses.

Related: See YourMoney.com’s Second wave of PPI claims on the horizon for more information.