The figures show the effect of the British Bankers’ Association’s decision to end its legal battle, taken in early May, in which it attempted to block FSA rules on compensation.

The requirements set out by the FSA forced banks to review all past sales of PPI, cover loan payments when people cannot work, and to contact those who have been mis-sold and offer their money back, even if they have not complained. 

The estimated cost to the banks is believed to be in the region of £9 billion with an average claim being £2,750.

Compensation paid, as of the first half of 2011 stands at around £215 million – with these figures being extracted from the 16 major sellers that represent 92% of the market.

Margaret Cole, interim managing director of the FSA's conduct business unit, says: "The treatment of PPI complainants has left an indelible stain on the financial industry's record.

"Looking ahead, we expect the amounts to vary somewhat as firms clear their backlogs while dealing with complaints.

"We remain committed to ensuring where consumers were mis-sold they will receive the appropriate redress from firms, and we are monitoring firms' progress to ensure this is done properly.

"Where we find this not to be the case, we are not afraid to take tough action."

What to do

Advice4debtNI would concur with best advice at this time, that being, if you feel you have been mis-sold PPI, make contact with the firm involved and do not wait for them to come to you.  If you're rejected or don't get a satisfactory response from your lender, you can take your complaint to the independent Financial Ombudsman Service, which, on recent figures, upholds around three quarters of PPI claims.

If you are struggling in maintaining your current credit commitments and would like free, impartial, confidential advice – call advice4debtNI on 0800 917 4607.  Advice4debtNI is a debt advice helpline, for Northern Irish residents, and is funded by the Department of Enterprise, Trade and Investment