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PPI mis-selling payouts hit £215m in first half of 2011

August 2011 Compensation for mis-sold PPI reached a total of £215 million in the first half of 2011, reports the BBC. The payments were made by sixteen anonymous firms and represented over 90 per cent of complaints made between January and June of last year. This follows an increase in activity surrounding PPI following the failure of a judicial review, brought by the banks in April, as a challenge to the compensation rules. In the two months immediately following the ruling, £102m was paid out. Since then High Street banks have set aside huge sums to meet the inevitable demand for refunds. Lloyds tips the scales at £3.2 billion, while Barclays is setting aside £1bn, RBS £850m and HSBC £269m. The Financial Ombudsman said it had received more than a quarter of a million complaints and had found in favour of the claimant in three quarters of cases. PPI is meant to cover a debtor’s loan repayments if they are unable to make them through illness or unemployment, but many banks forced customers to buy policies even if they were not suitable for the cover. FSA spokeswoman Margaret Cole told the BBC that “The treatment of PPI complainants has left an indelible stain on the financial industry’s record. “We remain 100% committed to ensuring that where consumers were mis-sold PPI they will receive the appropriate redress from firms, and we are monitoring firms’ progress to ensure this is done properly.”