The Big Four banks are struggling to meet their deadline of the end of this month to compensate customers wrongly sold payment protection insurance (PPI).

Barclays, HSBC, Lloyds and Royal Bank of Scotland are battling to clear a backlog of complaints in the next ten days, according to the Financial Mail.

In particular, many of the tens of thousands of customers will not know exactly how much compensation they are being offered, or see any sign of the money.

  • HSBC said it will send out decision letters ahead of the deadline, but customers might not receive their offers of compensation until four weeks later.
  • Lloyds says it is on track to provide ‘a clear response' to each customer ahead of the deadline. However, only some will get an offer of compensation at the same time.
  • RBS said customers will get a decision and an ‘indication of the figure we will pay'.
  • Barclays will not fully investigate all claims, but is checking only that someone was a customer and had PPI with the bank before it pays out as a ‘goodwill gesture'. The bank says it is on target for all customers to receive offer letters and detailed calculations of what it will pay by the end of this month.

Compensation will include a refund of premiums, plus backdated interest at 8%. Where the cost of PPI was added to a loan, there will also be compensation for the extra interest a customer had to pay.

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