BARCLAYS will refund some customers up to £750 each because of PPI mistakes.
Over a thousand people who banked with the firm will receive compensation after the regulator found they weren't given the right information
The Competition and Markets Authority (CMA) found that Barclays failed to send Payment Protection Insurance (PPI) information to some mortgage holders.
PPI providers are required to send annual reminders to customers so that they are aware of their policy costs and type of cover.
Providers also need to set out clearly that customers have a right to cancel – and how to go about this.
But, the CMA found that Barclays failed to send reminders to up to 1,306 of its former Mortgage PPI policyholders between 2014 and 2017.
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The payout, of up to £1million, is made up of refunds and goodwill payments.
Barclays reported the breach to the CMA in October 2021, which it is required to do under the PPI order.
Adam Land, senior director of remedies, business and financial analysis at the CMA, said: "Barclays will pay customers up to £1 million after breaching the CMA's PPI Order.
"That’s an average payment of around £750 per customer, which is particularly important as the cost-of-living crisis bites.
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"We will now work with Barclays to ensure these payments are made to customers."
The CMA has confirmed that Barclays is already taking action.
The bank has confirmed that it will write to all affected policyholders, informing each policyholder of Barclays and offer all affected customers a gesture of goodwill payment.
The bank will also offer the vast majority of affected customers the opportunity to submit a claim for a full refund of premiums from the date of the first missed PPI Annual Review.
What is payment protection insurance?
You may have been sold PPI if you took out finance during the 1990s or the start of the 2000s.
It was an insurance policy that was attached to products such as loans, mortgages or credit cards.
PPI was meant to payout if the policyholder fell ill, had an accident or lost their job.
It took lots of different names such as:
- Accident, sickness and unemployment insurance (ASU)
- Account cover
- Credit insurance
- Credit protection
- Loan care
- Loan insurance
- Loan protection
- Loan repayment insurance
- Mortgage payment protection insurance (MPPI)
- Payment cover
- Protection plan
How was PPI mis-sold?
Consumer groups started questioning the sales practices of banks and building societies around 2005 after it was found that many borrowers were unaware that they had been sold policies.
Some were also unable to claim despite paying for the insurance such as if they were self-employed or retired.
Another issue was that staff were incentivised to sell PPI with high commissions, which meant a lot of policies were mis-sold.
PPI sales were banned in 2009 and lenders were ordered to consider all complaints in 2011.
The FCA set a deadline for complaints in 2017 that said all redress should be considered by the end of August 2019.
Can you claim PPI?
The PPI claims deadline has passed.
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Borrowers had until August 29 2019 to make a claim from their bank or through the Financial Ombudsman Service for mis-sold PPI.
But as is the case of Barclays this week, customers may later find out they're owed redress after their original PPI provider reports any breaches to the CMA.
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