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PPI claims push firm to £24.7 million loss

PPI claims push firm to £24.7 million loss | Insurance Business UK

PPI claims push firm to £24.7 million loss

With less than a year left for consumers to file their payment protection insurance (PPI) complaints, claims are expected to come in droves – impacting firms who may have mis-sold PPI, and among them is digital retailer Shop Direct.  

Announcing its full-year results for the financial year ended June 30, the Liverpool-headquartered firm said it posted a pre-tax loss of £24.7 million, with much of the blame pointed at PPI claims costs. In the previous financial year Shop Direct enjoyed a £24.9 million profit.

Also contributing to the loss is the £22.5 million allotment for closure costs associated with the company’s new fulfilment and returns centre announced in April 2018.

“During the year the regulatory provision was increased by £128 million to cover customer redress payments for historical shopping insurance sales expected to be made before the FCA’s claims deadline of August 2019,” explained Shop Direct in its latest annual report.

It noted: “The charge follows an increase in the volume of claims observed by the group and across the industry. This is believed to have been driven by the FCA marketing campaign, launched in August 2017 and running until the August 2019 deadline.”

Shop Direct – which operates online stores Very.co.uk, Littlewoods.com, VeryExclusive.co.uk, and LittlewoodsIreland.ie – said the amount covers the estimated cost of customer redress claims in the year and of future customer redress payments, as well as associated processing costs.

Back in April the Financial Conduct Authority (FCA) released financial services complaints figures for the second half of 2017, showing that complaints about PPI reached their highest level in over four years.