Barclays makes pledge on PPI compensation

Barclays pledged today to compensate on a no-quibbles basis tens of thousands of its customers who were mis-sold payment protection insurance (PPI).  The group is the first bank to make such a move as it confirmed it was contacting customers who made a complaint before April 20 to settle claims in full as a "gesture of goodwill".

The move is likely to prompt calls for its peers - such as taxpayer-backed Lloyds Banking Group and the Royal Bank of Scotland - to follow suit. The banking industry last month dropped its appeal against a High Court challenge it lost over new Financial Services Authority rules on PPI mis-selling claims being applied retrospectively.

Barclays' announcement came as the FSA extended the time banks have to deal with the backlog of stayed PPI complaints and high volume of new complaints.

The FSA said all PPI complaints put on hold during the judicial review, launched last October, will receive a decision by the end of August. The standard response time would have been a maximum of eight weeks.