Clydesdale takes fresh £350m PPI hit as FCA drive sees claims soar

CYBG, which also includes the Yorkshire Bank brand, has been operating two PPI programmes in tandem over the past six months – a “proactive customer contact remediation exercise” and a customer-initiated new complaints handling process.

It said the number of PPI mis-selling claims it is now dealing with has surged by more than expected in its first half to March 31, to around 59,000.

CYBG said the deluge was a direct result of heightened awareness among consumers of the limited time remaining which has been highlighted by publicity campaigns run by regulators.

This push has taken the form of Financial Conduct Authority (FCA) television advertisements featuring an animatronic model head of Terminator star Arnold Schwarzenegger who urges viewers to people to “do it now”.

The banking group said: “The elevated level of complaints has been driven by a combination of factors, including heightened media coverage, the FCA (Financial Conduct Authority) advertising campaign and increased activity by claims management companies.

“The group now expects the current level of complaints to remain at an elevated level for a period of time, followed by a reduction in volumes and costs as we approach the time bar in August 2019.”

The new provision will see CYBG take a £202 million pre-tax charge on its balance sheet for the first half, as it said £148 million was covered by a conduct indemnity deed with National Australia Bank – the group’s former parent.

Complaints about payment protection insurance (PPI) drove a 13 per cent increase in the number of complaints made to financial services firms in the second half of 2017, according to figures published today by the FCA.

During the second half of 2017 a total of 3.76 million complaints were received, an increase of 427,032 on the first half of the year. Complaints about PPI rose by 40 per cent to 1.55 million, the highest level of complaints about PPI for more than four years.

In January 2018 firms paid out £415.8 million in redress to customers who complained about payment protection insurance (PPI). This is the highest figure since March 2016 and takes the amount paid since January 2011 to £30 billion.

Christopher Woolard, executive director of strategy and competition, said: “Having set a deadline for PPI complaints, we are encouraging consumers to decide whether they want to claim, and if they do, to make their complaint as soon as possible, as many already have.

“We are continuing to monitor and challenge all firms to ensure they maintain the expected standards and are delivering on their commitments to make it easy for people to complain about PPI.

“When PPI is taken out of the mix, the numbers of complaints firms are receiving has remained stable. Firms should be doing all they can to reduce complaints and ensure they are treating customers fairly.”