Arnie stars in £42m PPI campaign push

ARNOLD Schwarzenegger is fronting a £ 42m advertising campaign urging the victims of the payment protection insurance scandal to make a claim.

The 70-year-old Terminator star is taking centre stage in a TV and poster campaign organised by the City watchdog and funded by 18 banks guilty of swindling their customers.

The adverts – in which Schwarzenegger urges families to ‘make a decision, do it now’ – come two years ahead of a final deadline for claims. So far, banks have paid £27.4bn in compensation to 12m customers who were mis-sold PPI alongside loans, credit cards, store cards and mortgages.

But 64m PPI policies were sold between the early 1990s and 2010 – setting the scene for a fresh wave of claims. It’s thought the bill could reach £100bn. Financial Conduct Authority boss Andrew Bailey said: ‘Our campaign aims to cut through the noise on PPI. Our message, and Arnie’s, is “do it now” and I urge people to make a decision before the deadline.’

In the adverts, former governor of California Schwarzenegger urges people to make up their minds about a PPI complaint before the deadline on August 29, 2019. It is backed by lenders believed to include the five big High Street banks. The TV spot features shoppers browsing in a supermarket, when Schwarzenegger’s head suddenly appears on tank tracks.

He angrily urges them to ‘make a decision’ on whether to claim compensation. It cost £4.9m to produce the ad, including the cost of Schwarzenegger’s pay, likely to have been a seven-figure sum.

Another £24.4m was spent on buying airtime and billboard space, while £3m was given to design agencies including M&C Saatchi.

The rest of the £42.2m bill went on a helpline and website, testing, staff costs and spin doctors.

Although PPI has already cost the industry enough to build four new Royal Navy aircraft carriers, analysts are braced for worse to come.

Another £8bn has been set aside by the largest lenders to cover additional claims by people sold worthless card protection insurance, but this may be an underestimate.

Some industry estimates suggest the eventual bill might be as high as £100bn – almost four times what has been doled out to date.

The advertising push is likely to provide a boost to the claims management firms which make a profit by submitting PPI applications on behalf of wronged customers in exchange for a slice of the cash.

However, customers are generally better off applying on their own behalf as they have just as much chance of success and can then keep all the payout.

Although banks’ final bill for the debacle is likely to go up substantially, Hargreaves Lansdown analyst Laith Khalaf said he thought £100bn was overblown.

‘Undoubtedly there’s more pain to come for banks, and I can fully appreciate they might have underestimated the full cost,’ he said.

‘We’re talking about incremental increases, not three or four times what has been paid out. However compelling Mr Schwarzenegger is, even his charms probably couldn’t achieve those figures.’