The payment protection insurance scandal erupted several years ago. It has become one of the biggest financial disasters in the country’s history. Most experts believed that it would have subsided by now, but customers are still filing record numbers of PPI claims every year. Financial analysts and representatives from the UK’s largest banks believe that the crisis will continue to grow in the months ahead. An official from Lloyds Banking Group expects that customers will file hundreds of millions of pounds worth of PPI claims in the near future.
Lloyds Concerned About the Months Ahead
The PPI scandal has taken its tolls on many of the banks. Lloyds was one of the biggest offenders so it is facing more claims than many of its competitors. The taxpayer owned bank has already lost hundreds of millions of pounds from customers who have filed PPI claims.
Lloyds has already set aside over £7 billion to handle future PPI claims. The bank originally set that money aside as a precaution. Lloyds officials never expected it would need to use the entire pool of funds they allocated. However, analysts have since calculated that those funds may not be enough. They believe they may need to set aside another £170 million.
Both Number and Size of Claims Are Rising
The PPI crisis continues to grow every month. The Financial Ombudsman Service recently reported that nearly 10,000 new claims are submitted every week. Lloyds said that PPI claims are becoming a bigger burden for them every month.
Lloyds is receiving more PPI claims every month. Officials also report that the size of the claims is increasing as well. The average PPI claim was worth £1,700 between January and June this year. However, the number of claims being filed is so high that even a slight increase in the average value of a claim would be very costly.
Lloyds Analysts Trying to Be Safe
Lloyds analysts have found that the PPI crisis has been much higher than they originally anticipated. They want to make sure that they don’t make the mistake of underestimating the value of PPI claims again. They feel that the £70 million they are setting aside will be more than enough, but can’t afford to take any chances.