A decision by HSBC to set aside a further £340m to fund payment protection insurance (PPI) compensation claims has taken the amount banks have now earmarked for PPI mis-selling redress to almost £10bn, a report says.
The move means HSBC will have set aside £1bn in total and follows an increase by Lloyds last week to £4.3bn.
RBS is also expected to set aside more money when it reports its results this Friday, according to the report from Which? entitled PPI compensation fund breaks £10bn barrier.
The five biggest banks - HSBC, Royal Bank of Scotland (RBS), Barclays, Lloyds Banking Group and Santander - have to date now put aside a total of £8.8bn to deal with complaints.
Which? chief executive Peter Vicary-Smith said: "These latest figures from the banks show that PPI is now on course to become the biggest consumer financial scandal of all time, exceeding pensions mis-selling and the endowment mortgage scandal.
"The banks must make it straightforward for people to reclaim PPI themselves, for free, so they don't resort to expensive and unnecessary claims management companies (CMCs).
"We now need the government to raise its game too, and toughen up the regulation of unscrupulous CMCs who are exploiting consumers who just want to claim back what is rightfully theirs."
The Financial Services Authority (FSA) said that £4.8bn has been paid out to consumers mis-sold PPI between the beginning 2011 and the end of May 2012. This leaves around £5bn yet to be claimed.
