PPI pay-outs could be short by as much as £1bn

Payment Protection Insurance (PPI) compensation pay-outs from banks could have fallen short by a whopping £1bn.

Banks may have been underpaying customers who were mis-sold PPI on their credit cards and were owed compensation, due to banks failing to pay out certain additional charges.

The alleged shortfall has arisen because, the BBC reports, “although these banks all refunded the premiums on their mis-sold PPI policies plus interest as regulators require, they have been failing correctly to refund additional charges which were triggered by the premiums of the mis-sold PPI policies”.

The BBC commissioned an expert who estimated that the total shortfall in PPI pay-outs could be “somewhere in the region of £1bn”.

Read the full story.