Britons faced a crunch deadline Thursday to claim compensation for mis-sold insurance that is costing UK banks billions of pounds, while tarnishing their battered reputations further following several financial scandals.
Customers have until 11:59 pm (2259 GMT) to question lenders whether they have had Payment Protection Insurance added to credit products such as loans, mortgages or payment cards.
While PPI was intended to cover missed payments, for example if a policy holder lost their job, in many cases consumers were unaware the insurance had been added to a product, while others would never have benefitted despite pressured into taking it.
UK watchdog, the Financial Conduct Authority (FCA), this week said 36 billion ($44 billion, 40 billion euros) had been paid out in PPI compensation since the start of 2011, when banks lost a high court appeal against tighter regulation of the insurance.
Lloyds Banking Group (LBG), a lender bailed out by the UK government following the 2008 global financial crisis, is by far the worst affected, setting aside more than 20 billion, an amount likely to rise.
According to the FCA, an estimated 64 million PPI policies have been sold in the UK, the majority over a 20-year period to around 2010.
- ‘Billions still owed’ - Ahead of the deadline, consumers can contact banks and credit-product providers directly, asking them if they ever had PPI.