PPI mis-selling cost set to soar
The mis-selling of controversial payment protection insurance (PPI) could cost insurers as much as £203 million in the future after the City watchdog revised its original compensation estimate.
The Financial Services Authority (FSA) said it was now expecting around 450,000 complaints to be filed rather than the 158,000 originally predicted.
The sum comes on top of the £900 million to £2.7 billion banks are already expected to pay out to those who were sold the policies in the past.
FSA officials said last year that firms representing more than 40% of sales in the single premium PPI market had agreed to review sales stretching back to July 2007.
The watchdog is also due to issue new guidance to ensure all PPI complaints are handled properly. Approximately 185,000 rejected claims will be reassessed using this criteria.
The measures aim to ensure that consumers are treated consistently, either when they purchasing a new PPI policy or complaining about an existing one.