Banks are beginning to improve the way they are handling PPI complaints, according to an update from the City regulator.
The Financial Conduct Authority said that £16 billion had been refunded to customers over the past three years.
It added that pressure on banks, credit card providers and personal loan companies had caused them to reassess over 2.5 million complaints which had been rejected out of hand or under-compensated.
“The process is now working well; in just over three years £16bn has been put back into the pocket of the consumer,” said Martin Wheatley, the FCA chief executive.
“Given the enormity of this exercise it is no surprise that there have been some issues along the way but our approach is delivering a good result for consumers.”
Firms have handled 13 million PPI complaints since the mis-selling scandal rose in 2007, with consumers coming out successful around 70% of the time.
The FCA said that this uphold rate had fallen in 2012 and 2013. But further investigation had shown that the plaintiffs were not always treated fairly.
Further intervention was prompting firms to handle cases better, it added. Figures from the Financial Ombudsman Service, the independent adjudicator, show that fewer complaints have been overturned as the process has continued.
In late 2011, a huge 88% of cases relating to the unsatisfactory handling of PPI complaints were overturned by the Ombudsman.
This has since fallen to 56% by the end of 2013. While much improved, it still shows that the majority of cases taken to the adjudicator are ruled in the consumer’s favour.
The FCA admitted that there is still some work to do for offending firms.
The regulator has pressed firms to contact likely victims of PPI mis-selling who have yet to complain.
Around 3.25 million letters have already been sent out, with another 2 million to follow.
“Making sure anybody previously mis-sold PPI is treated fairly now, and paid redress where its due, is an important step in rebuilding trust in financial institutions,” Mr Wheatley added.
“In around two and a half million complaints this was not necessarily the case so, at our request, firms will be looking at these complaints again.”