The Week Unzipped: Payment protection insurance complaints soar after banks defeated

COMPLAINTS about mis-selling of payment protection insurance quadrupled after the banking industry's defeat at the High Court in April.

The Financial Ombudsman Service received an average of 900 PPI cases each day between April and June. Tens of thousands of complaints were put on hold during the legal proceedings. These became unfrozen when the High Court rejected the banks' challenge to new rules on the sale of PPI.

Banks will spend billions on compensation as they begin to tackle the backlog of complaints. Lloyds Banking Group has allowed 3.2 billion to cover payouts to claimants while Barclays has set aside 1 billion.

Track and fix deal

Yorkshire building society launched an online mortgage product that allows customers to both track and fix their mortgage rate. The track and fix mortgage has a five-year term comprising of a two-year tracker period at base rate + 1.79 per cent followed by a three-year fixed term at 3.79 per cent. The mortgage requires a 40 per cent deposit and charges a 995 fee.

Barclays shaved up to 0.55 per cent off its fixed and tracker mortgage rates. The new rates include a three-year fix down from 4.68 per cent to 4.13 per cent with a 20 per cent deposit and a five-year fix down from 5.48 per cent to 4.98 per cent with a 15 per cent deposit.

Nationwide reduced its five-year fixed mortgage rate to 3.79 per cent and two-year tracker rate to base rate + 1.94 per cent. Both mortgages are available with a 30 per cent deposit and charge a 999 fee.

First Direct cut its capped tracker mortgages by 0.2 per cent and added a fee-free option to the range. Capped tracker rates start at 1.98 per cent above base rate, currently 2.48 per cent, capped at 4.38 per cent until October 2014 with a 35 per cent deposit and 1,499 fee. The fee-free option starts at 2.38 per cent above base rate, currently 2.88 per cent, capped at 4.28 per cent until October 2014.

Leeds lowered its two-year fixed mortgage rate by 0.5 per cent to 3.14 per cent available with a 20 per cent deposit and 199 fee. The society also introduced a five-year fix at 4.89 per cent available with a 15 per cent deposit and 1999 fee.

Poppy pays bonus

Coventry building society relaunched its Poppy online saver account paying 3.15 per cent including a 1.15 per cent bonus for 12 months. The easy-access internet account allows up to four penalty-free withdrawals per year on balances between 1 and 250,000. Coventry will donate 0.05 per cent of average balances held in Poppy accounts each year to The Royal British Legion.

Yorkshire launched a one-year e-bond paying 3.45 per cent and an 18 month savings bond paying 3.6 per cent. The bonds are open to investments between 1,000 and 2 million and do not allow withdrawals during the products' term.

Santander introduced a fixed-rate bond paying 3.05 fixed for a year or 3.3 per cent for two. Savers can invest between 500 and 2 million and no withdrawals are permitted until maturity. The bank also offers a one-year tracker bond paying 2.5 per cent above base rate on balances between 10,000 and 2 million.