The London Daily News

06 May, 2011 08:10 (GMT +01:00)

Banks facing £10 billion hit for "mis-selling" insurance

City News Desk

Banks who were mis-selling pay protection insurance face a potential claim of £10 billion according to an admission by the Lloyds Banking Group who has said that it has more than doubled it original provision of £3.2 billion for any claims.

Dan Plant of MoneySavingExpert.com said:

"This is a massive victory and vindication of what consumers, and now the court, have been yelling loudly. Lloyds has finally seen sense, yet as millions of PPI policies have been mis-sold over years, the other massive institutions involved must now follow suit, admit that customers were badly treated and give the billions of pounds back.”

Claims against Barclays, Royal Bank of Scotland had the biggest market shares in PPI selling businesses after Lloyds, which could according to analysts cost £1.13 billion and £1 billion respectively.

Lloyds new Chief Executive Antonio Horta-Osorio claimed that the provisions made by his banks was "sensible, prudent and the right thing to do".

Other banks like HSBC are joining the British Bankers Association in a last ditch attempt next week to appeal against a legal decision that ruled that banks had been consistently mis-selling payment protection insurance to customers.

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