LONDON (Reuters) – Britain’s lenders are starting to put the most costly consumer scandal to hit the industry behind it, with payouts for mis-sold payment protection insurance (PPI) falling in the second half of 2018 ahead of an August deadline for claims.
Firms paid 1.99 billion pounds ($2.59 billion) in compensation to customers for mis-sold PPI over the period, down 14 percent on the first half of the year and 3 percent lower than the same period in 2017.
The number of complaints about PPI also fell, down 8 percent on the first half to 1.72 million, according to the latest figures from watchdog the Financial Conduct Authority published on Thursday.
This helped pull down the overall number of complaints against financial firms by 5 percent.
The slowdown in PPI complaints will come as a relief for banks, including RBS and Lloyds, which have already paid out more than 30 billion pounds in redress to customers since 2007.
PPI policies were meant to protect borrowers in the event of sickness or unemployment but were often sold to those who would have been ineligible to claim.
PPI claims had previously surged following an FCA advertising campaign launched in August 2017 featuring the animatronic head of actor Arnold Schwarzenegger, ahead of this August’s deadline.
Despite the fall, PPI remained the most complained about product, accounting for 40 percent of all complaints.
Complaints about current accounts also fell 13 percent, after a jump in the first half in part caused by a major IT failure at challenger bank TSB, a subsidiary of Spain’s Sabadell.
Complaints about credit cards, the third most complained about product, bucked the trend rising 10 percent.
Christopher Woolard, executive director of strategy and competition at the FCA, said: “It is encouraging to see that complaint figures have dropped and firms are dealing with complaints more quickly.”
(Reporting by Iain Withers; editing by Emelia Sithole-Matarise)