Barclays Reimburses PPI Costumers

After losing their High Court battle, Barclays Bank has agreed to reimburse customers who were previously mis-sold Payment Protection Insurance. As well as reimbursing the total value of premiums, Barclays have pledged to refund all interest.

Originally intended to help those unable to pay credit card or monthly payments, PPI suffered criticism as many customers found themselves ineligible to claim.

The Financial Ombudsman Service (FOS) have released a statement claiming that over 40, 000 complaints had been received since the start of April, forcing Barclays to set aside £1bn in compensation.

It is believed that the bank will reimburse tens of thousands of customers as “a gesture of goodwill”; but only if their complaints were received before April 20. Customers who complained after this date will have to wait 16 weeks for their complaints to be settled and are not immediately entitled for compensation.

A spokesman from Barclays Bank explains that complaints received after April 20 will be assessed on merit and not given immediate reimbursement.

Which? Chief executive, Peter Vicary-Smith, applauds Barclays' actions. He said: "It's fantastic to see Barclays stepping up in this way, acknowledging their mistakes and refunding customers what they're owed, no questions asked.”

He added: “Hopefully this will have a domino effect and other banks will follow suit.”

Barclays, Lloyds Banking Group and RBS are all affected by rulings by the Financial Services Authority (FSA). The FSA ruled that compensation is necessary when the mis-selling of a policy has occurred and has given banks till the end of August to settle complaints put on hold during the court case.

By Catherine Rees

[Image courtesy of WW Photos]