Ann: Increase in legacy PPI costs, page-6

At least its not just CYB having to deal with this - its all British banks.

https://www.ft.com/content/95d4cfd6-9e88-11e9-9c06-a4640c9feebb

Banks hit by wave of last-minute PPI claim inquiries

British banks have been hit by a surge in the number of customers trying to win compensation for mis-sold payment protection insurance ahead of a deadline that will close one of the industry’s most damaging scandals.

Some companies that try to win payouts for customers have more than tripled the number of messages they send to banks on potential victims before the cut-off takes effect in August, according to industry figures.

Executives at several banks said they had been inundated with a flurry of last-minute “information requests” that are filed to see if a customer is entitled to compensation. They warned that the cost of processing the applications could force them to take a fresh round of provisions when they report their forthcoming financial results.

“As we get towards the end there has been an absolute surge in information requests; it’s gone nuclear in the second quarter of the year,” said one executive at a large high street bank.

The executive said that many of the information requests were speculative and that just 10 per cent were likely to result in full-blown claims — around half the normal average — but they warned that the administrative costs for banks would still be significant, even without an uptick in compensation payouts. Lenders have paid more than £35bn in compensation since 2011 and spent several billion pounds more in processing costs.

Some banks, including Lloyds and the Co-operative Bank, already highlighted an increase in speculative requests at their first-quarter results, but executives said the rate had accelerated since. The Financial Conduct Authority says information requests can take up to eight weeks to process, meaning they needed to be submitted by the end of this week to guarantee a response before the deadline to make formal complaints on August 29.

A senior executive at another high street lender accused claims management companies (CMCs) of “chucking a load of rubbish at the wall before the deadline to see if anything sticks”.

Claims companies acknowledged the increase, with a senior manager at one PPI specialist noting that its complaint volumes had increased by around 250 per cent over the second quarter. However, they rejected the suggestion that the rise was driven by cynical speculative requests.

“In respect of the increased volume, I certainly don’t believe this is a result of highly speculative requests. It’s more the reality of an artificial deadline with a significant PR campaign by the FCA and CMCs,” the person said.

In a sign of the rising costs, several banks were this week still searching for additional staff to help deal with the problem despite the impending deadline, according to job ads.

One outsourcing company, Brightpool, said it was looking for intakes of staff who would be answering PPI complaints for one of the “big four” banks until at least December — with “potential for extension”.