Banking analysts have poured cold water over fears of a new avalanche of PPI claims after court rulings which suggest all customers who bought the toxic product were unfairly treated.
Experts said that the scandal is unlikely to be reignited - despite several decisions which forced banks to refund customers their payment protection insurance (PPI) payments because of huge commission fees, even if the product was not mis-sold.
A compensation deadline for customers who were sold PPI under false pretences passed last summer. The product was meant to protect consumers from loan payments if they were unable to work, but was frequently flogged to those who did not want or could not use it. The mis-selling scandal has already cost UK banks £38bn.
An isolated series of court cases have also led to rulings that even when a customer got the product because they wanted it, huge commission fees meant the PPI deal was unfair and the client was entitled to their money back.
However bank analysts and industry insiders said that although lenders can be challenged in court if an unfair relationship existed, they are not expecting a second PPI gold rush.
Three banking insiders said there is no expectation in the industry that recent county court claims could trigger another compensation scheme, as currently each case must be fought out individually.
Ian Gordon, a banks analyst at Investec, said: "We are not yet aware that costs in relation to these cases will be materially different to banks’ existing assumptions and we're not talking about a new wave of claims, just the tail costs of settling existing claims.
"There's no new claims process, [just] an existing bank of claims either being settled through the individual banks’ claims process or litigation within existing provisions."
A spokesperson for NatWest Group, formerly known as RBS, agreed and said what it has set aside so far for PPI is already intended to over future costs.
The fears over a new wave of PPI payments have resurfaced a year after claims lawyers told The Telegraph that these rulings - following a case in 2014 known as “Plevin” which said PPI had been mis-sold because banks were paid commission by insurers which was, in some cases, worth 80pc of the value of the policy - could lead to future payouts.