Banks leaving 'open goal' for claims firms, Which? warns

Consumer champions have called on banks to settle claims for the misselling of payment protection insurance (PPI) faster, after it emerged that almost £2bn in compensation was paid out last year.

Although £441m was paid out by banks in December – the largest monthly sum so far – Which? said that banks need to do more to step up the pace of redress and help consumers avoid the use of claims management companies.

Last year a total of £1.9bn was paid in compensation, but that is still only a quarter of what lenders are expected to refund.

Which? executive director Richard Lloyd said that too many people are still finding the claims process too lengthy.

He said: "The banks must streamline the process to make it easier for people to claim. Otherwise this leaves an open goal for claims management companies that charge people a hefty fee for putting in a claim which is easily done yourself for free."

An estimated £7.6bn has been set aside by banks to compensate consumers who were mis-sold PPI. It is thought that the compensation could be worth more than £2bn to claims firms.

Which? said anyone who thinks they may have been mis-sold PPI should contact their lender directly or visit its website.