Consumers who were mis-sold Payment Protection Insurance (PPI) on their credit cards may have been under-compensated by £1bn, according to a report by industry experts.

The report found that banks and credit card firms did not account for monthly charges caused by PPI and due to this credit card holders with Lloyds Banking Group, Barclays, MBNA and Capital One potentially owe thousands of pounds in additional compensation, BBC reported.

Go deeper with GlobalData

Premium Insights

The gold standard of business intelligence.

Find out more

The report estimates that the compensation amount should be higher where additional charges were levied to cardholders’ bill due to the premiums of mis-sold PPI policies.

As per the regulatory requirements, the bank and the card companies has repaid the cost of the PPI policy as well interest; although, they failed to include charges triggered by the controversial insurance, the publication reported.

The experts opined that it is difficult to assess how much additional compensation these financial firm could be owed and the responsibility to claim the difference lies with consumer.

Cliff D’Arcy, a former banker and PPI expert, was quoted by the BBC as saying that: "I’m confident that the figure will be somewhere in the region of £1bn of extra compensation.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

"It’s because banks were charging very high penalty fees, very high rates of interest on borrowing and some of these claims go back decades. So it just compounds and multiplies to a very big number," D’Arcy added.

The Financial Ombudsman Service, which oversees disputed compensation claims between customers and banks, said the additional charges should have been refunded.

According to an estimate, approximately 16 million PPI policies have been mis-sold since 2005 and compensation by banks averages about £3,000 per claimant, translating £22bn in total repayments.