As RBS again raises its PPI liabilities, are there reasons for concern about the claims system?

YES
Stephen Gilchrist

Lloyds now claims that its liability against payment protection insurance (PPI) misselling will hit £5.3bn, and has set aside a further £1bn, while RBS is expected to confirm that its total bill will increase by £400m to reach £1.7bn. Have world-ranking financial institutions grossly underestimated the scale of their original faults, or are many of the compensation requests received from claims management companies bogus? Even though the original scandal exposed terrible problems at retail banks relating to the sale of products by commission-driven managers, the claims management industry has since been involved in a feeding frenzy on the back of PPI. We have good reason to be concerned about the integrity of those who committed the initial scandal, and of those now seeking to profit from their conduct.

Stephen Gilchrist is chairman and head of regulatory law at Saunders Law.

NO
Peter Vicary-Smith

The £12.7bn payment protection insurance (PPI) racket has now become the biggest financial mis-selling scandal of all time. Let’s not forget that the banks got themselves into this mess and were more than happy to make a profit out of consumers at the time – with some individuals receiving 87 per cent commission for selling PPI. It’s now the banks’ duty to right this wrong and properly compensate consumers what they are rightly owed. All major UK retail banks are profitable despite the PPI payouts. The problem is that the banks have been in denial about the true scale of the scandal and their piecemeal approach to topping up provisions is not good enough. Banks must come clean about how many more complaints they’re expecting, publish monthly updates on the amounts that have been paid back, and claw back bonuses from executives who presided over PPI mis-selling.

Peter Vicary-Smith is chief executive of Which?