Banking customers who were mis-sold payment protection insurance have been advised that they could receive compensation by October 16 2011.
The Financial Services Authority has announced that all outstanding complaints must be responded to within 16 weeks. Barclays have recently confirmed that they will also pay compensation to PPI customers who made a complaint before April 20.
The banks have tried to fight back and avoid paying compensation but last month the High Court dismissed their attempts to overturn new rules on the sale of PPI.
The banks require to pay consumers the compensation as they were mis-sold the PPI. The new FSA rules require insurers to review past sales of PPI and pay compensation where due even where customers had not complained.
The policies were supposed to repay loans if their income drops due to unemployment or illness however many customers were unaware that they were paying for the insurance or that they did not need it. Many people such as those self employed had signed up for the polices even though they were not eligible to complain.
PPI is the most complained about type of financial produce and the Financial Ombudsman service receives around 5,000 PPI related complaints each week.