London, Nov. 10, (PA Media/dpa/GNA) - Barclays will pay out £1 million ($1.13 million) in customer refunds because of mistakes it made over its payment protection insurance (PPI) policies, Britain’s competition watchdog has said.
The banking giant will pay an average of £750 to up to 1,306 customers who were affected by the breach between 2014 and 2017.
The Competition and Markets Authority (CMA) said that Barclays failed to send a reminder to mortgage customers with PPI policies letting them know the cost of their policy, the type of cover they had and reiterating their right to cancel.
This meant that a swathe of customers – who were sold PPI along with their mortgage loan – may have held onto the policy for longer than they needed or stopped shopping around for cheaper or better alternatives.
This could have resulted in them losing money and means they are entitled to compensation, the CMA said.
It is also a breach of the watchdog’s PPI Order, which imposes rules on any providers of the insurance policies, including the obligation to send out an an annual review or reminder.
Adam Land, the senior director of remedies, business and financial analysis at the CMA, said: “Barclays will pay customers up to £1 million after breaching the CMA’s PPI Order.
“That’s an average payment of around £750 per customer, which is particularly important as the cost-of-living crisis bites.
“We will now work with Barclays to ensure these payments are made to customers.
“It’s important that all PPI providers take notice – we won’t hesitate to take action, as we have done here, if customers have lost out.”
Barclays will pay out up to £1 million, made up of refunds and goodwill payments, and will begin contacting all customers who were affected.
The banking giant has breached the order before, but this particular offence was only discovered in 2021 when it was then reported to the CMA.
While the watchdog has told Barclays to compensate customers, it currently does not have the power to impose fines on firms that break its rules on PPI.
It said it called for such powers because it would help to deter companies from breaking the law and take their obligations more seriously “for the benefit of UK consumers.”
Following the well-reported PPI miss-selling scandal, high-street banks like Barclays, NatWest and Lloyds Bank paid out billions of pounds in compensation to customers who made PPI claims.
A Barclays spokesperson said: “Following a recent review, Barclays will be putting things right for a small number of current and former mortgage PPI policyholders who did not receive annual review statements when they should have.
“We apologize to those impacted and for any inconvenience this may have caused.”
It added that all impacted customers will receive a gesture of goodwill and, in the vast majority of cases, will be given the opportunity to claim a refund of past premium payments.
GNA