Barclays is set to pay up to £1million to customers after breaching an order over payment protection insurance (PPI). The Competition and Markets Authority (CMA), which works to ensure consumers get a good deal when buying products and services, said it had written publicly to the banking giant after it failed to send a reminder to customers about its PPI policies.
Under the CMA’s PPI order, providers must send annual reminders to customers that set out clearly the cost of their policy, the type of cover they have and remind them of their right to cancel. The CMA said that Barclays breached the order by failing to send reminders to up to 1,306 of its former Mortgage Payment Protection Insurance policy holders between 2014 and 2017.
These customers, who held both a mortgage and an associated PPI policy with Barclays, had moved house and notified Barclays of their new address. The CMA said that Barclays failed to act properly on this information, with affected customers not receiving reminders.
Barclays only discovered the 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 - which may have cost them money.
The payout of up to £1m is made up of refunds and goodwill payments. It comes after Barclays reported the breach to the CMA in October 2021, which it is required to do under the PPI order.
Adam Land, 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.”
The CMA cannot currently impose financial penalties on businesses for breaches of this kind but has called for the power to do so. It said that imposing fines would allow it to take quicker and stronger action against companies that break the law.