PPI compensation bill reaches £2bn!

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PPI compensationCompensation for people who've been mis-sold Payment Protection Insurance (PPI) reached a whopping £1.9 billion last year.

A huge number of people have been mis-sold PPI, a policy which covers your monthly loan, credit card or mortgage payments, or a percentage of them, if you can't meet them due to being unable to work.

People have found themselves landed with PPI when they didn't ask for it, or were told it was compulsory. Some were wrongly sold it when they were unemployed, retired or self-employed, making it unsuitable for them.

Last year compensation for this reached £1.9 billion - some £441 million was paid out in December alone.

The Financial Services Authority has now revealed banks are setting aside huge amounts of money - an estimated £7.6 billion - to compensate these people. Barclays alone has ringfenced £1 billion.

PPI problems have seen the number of complaints received by the bank soar by 67%.

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