Payment protection insurance batters RBS and CYBG

Lenders issue updates following complaints submission deadline

Payment protection insurance batters RBS and CYBG

Insurance News

By Terry Gangcuangco

The ghost of payment protection insurance (PPI) past is not done haunting the likes of CYBG Plc and the Royal Bank of Scotland.

Anyone closely watching the PPI space will know about last week’s mad scramble to get last-minute complaints in. Now that the dust has settled, RBS and the parent firm of Clydesdale Bank have issued their respective updates on further costs they will incur in handling the additional claims.

“The volume of claims received during August was significantly higher than expected, with a further spike in the final days leading up to the deadline of 29 August 2019,” stated the Edinburgh-headquartered lender, which made provisions for PPI claims to the end of June totalling £5.3 billion.

“RBS therefore now expects to make an incremental charge for PPI claims, in addition to the provisions recorded to 30 June 2019, in the range of £600 million to £900 million in its Q3 2019 results, which takes into account claims by the Official Receiver.”        

The board of CYBG, meanwhile, is anticipating an increase in provisions by no less than £300 million and as much as £450 million.

In a regulatory filing, the banking group explained: “This is primarily due to an unprecedented volume of PPI information requests received during August in advance of the PPI complaint deadline of 29 August 2019 and in line with the rest of the industry.”

CYBG said it received more than eight months’ worth of information requests in August, as well as a weekly average of approximately 5,000 complaints during the first four weeks plus an additional 22,000 complaints filed during the final three days.

Following the closing date, the Financial Ombudsman Service offered a clarification addressed to consumers.

“As the deadline has now passed, you can no longer make a complaint to the financial business, unless your PPI policy was sold after 29 August 2017 or your complaint is about a claim being turned down by an insurer,” it said. “But if you can clearly show that there were exceptional circumstances that meant you missed the deadline, you might still be able to complain.”

According to the ombudsman, examples that might be considered exceptional are a period of serious ill health and a bereavement.

Related Stories

Keep up with the latest news and events

Join our mailing list, it’s free!