Barclays will pay up to £1m to more than 1,300 mortgage customers after the Competition and Markets Authority found that the lender breached the watchdog’s payment protection insurance rules.
Lenders must send annual reminders to PPI customers that set out clearly the cost of their policy, the type of cover they have and remind them of their right to cancel, under the CMA’s 2011 PPI order.
Barclays breached the order by failing to send reminders to up to 1,306 of its former mortgage payment protection insurance policyholders between 2014 and 2017, which amounts to average payouts of £750 each.
These customers, who held both a mortgage and an associated PPI policy with Barclays, had moved house and notified Barclays of their new address.
But the markets watchdog says: “Barclays failed to act properly on this information, with affected customers not receiving reminders.
“Barclays only discovered this breach in late 2021. Failure to provide these reminders meant that customers may have kept their policies for longer than they needed or stopped checking for cheaper or better alternatives, and this may have cost them money.”
The payout is made up of refunds and goodwill payments, and comes after Barclays reported the breach to the CMA last October.
CMA senior director of remedies, business and financial analysis Adam Land says: “Barclays will pay customers up to £1m 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.
The CMA cannot impose financial penalties on firms for breaches of this kind, but has called on the government for the power to do so.
Lender have paid out £38.3bn in compensation since 2011 to cover mis-sold PPI policies, according to the Financial Conduct Authority, in what has become one of the largest consumer redress schemes in British history.
