PPI mis-selling scandal: Five things you need to know about compensation

Lloyds bank increased provisions for PPI compensation to £4bn in its 2015 financial results, bringing the total bill for its role in the UK's biggest-ever mis-selling scandal to £16bn

Lloyds seems to be the worst for dealing fairly with customers' complaints (Getty Images)

Hasn't this been dealt with yet?

Not by a long shot. This week Lloyds bank was forced to set aside more money to cope with its bill for anticipated compensation payouts to customers who bought the often unnecessary and expensive insurance.

How much will it pay back to customers?

On Thursday the banking giant admitted it had increased provisions for PPI compensation to £4bn in its 2015 financial results. That will bring the total bill for its role in the UK's biggest-ever mis-selling scandal to £16bn – more than all the other banks and building societies involved in the scandal put together.

Is Lloyds the worst for PPI compensation?

It seems to be the worst for dealing fairly with customers' complaints. It has repeatedly faced accusations that it has compounded its crimes by using delaying tactics to try to wear people down, in the hope they will give up their claims. Financial Ombudsman Service figures have repeatedly highlighted Lloyds as one of the worst for using the tactic.

What have the ombudsman's figures shown?

The latest figures, published on Tuesday, revealed that 78 per cent of the complaints against the bank were upheld between July and December 2015. Significantly, that is the same rate as in the first six months of the year but higher than the 74 per cent of complaints upheld again the bank between July and December 2014. This suggests Lloyds has been making even less of an effort to deal fairly with customers looking for the compensation to which they are entitled.

Is it just Lloyds that is guilty?

Of course not; all the banks carry the shame of mis-selling millions of PPI policies. In terms of dealing fairly with the subsequent complaints, the credit card companies also appear to be poor. Capital One was ruled against in 74 per cent of cases taken to the ombudsman, while at MBNA the figure was 69 per cent. In contrast, while Bank of Scotland had more complaints than any other individual financial business, the number upheld against it was less than half, at 47 per cent.