According to the latest figures, the total expense of companies for the mis-selling of payment protection insurance (PPI) has touched £ 12 billion.

Lloyds has already allocated an additional £1 billion while Barclays has set aside additional £700m for the settling claims relating to mis-selling of such insurance schemes. RBS has also set aside an extra £400m to compensate customers and the latest addition takes the total to £1.7 billion.

Experts say that the mis-seling of PPIs is become the worst scandal of its type ever. There are allegations that the banks pushed worthless insurance products on customers to increase their earnings while making the customers pay for insurance that they did not need.

Most customers go to a claims management agency for claiming their compensation. The agency usually pocket a quarter of the claim amount if a customer allows the agency to claim for mis-sold payment protection insurance
(PPI) on their behalf. As a result a £1bn industry has come into existence to assist customers claim from banks and other institutions.

According to estimates, about half of all PPI claims are made through claims companies and as the banks have set aside £12bn to settle these claims, the opportunity for the industry is huge.