LONDON (Reuters) - Lloyds Banking Group’s (LLOY.L) chief executive on Monday backed a time limit for customers to claim compensation for mis-sold insurance which is costing British banks billions of pounds.
The British Bankers Association, a lobby group, wants an April 2014 deadline for claims arising from payment protection insurance (PPI) sold with loans and mortgages.
Antonio Horta-Osorio told a parliamentary commission on banking standards that a cut-off would benefit customers and banks and remove the huge costs of investigating bogus complaints from claims management companies.
UK banks have set aside 12 billion pounds to deal with the worst mis-selling scandal in British history and industry sources have said the bill could double.
Horta-Osorio also said the bank had set aside 90 million pounds ($142 million) to compensate small firms mis-sold complex interest rate hedging and indicated the sum will rise.
He said Lloyds was examining more swaps transactions for potential mis-selling following a report from the UK’s financial regulator.
Britain’s banks face another round of compensation claims that could total billions of pounds after the Financial Services Authority (FSA) found the products had been widely mis-sold.
”The new scope of the review is significantly wider than it was in December, Horta-Osorio said, adding that it will update the market on the issue at the time of its full year results on March 1.
Reporting by Matt Scuffham; Editing by Steve Slater and David Cowell