Banks" misery goes on - FT.com It's been another bad week for banks. Barclays has doubled its original bill for mis-sold payment protection insurance to £2bn, while Lloyds" Bank of Scotland unit has been heavily fined for regulatory failings. The extra £700m provision at Barclays means that UK banks have now set aside a total of more than £10bn to repay customers who were wrongly sold PPI, making it one of the most expensive consumer scandals in history. PPI policies were supposed to cover personal loan or mortgage repayments if the borrower fell ill or lost their job, but were often sold to customers who could not make a claim on them. The number of customers who say they were mis-sold PPI policies has far exceeded original estimates, and although payouts for PPI fell in July, they rose again in August and September. Consumers are also starting to send in more claims themselves, rather than use a claims management company, says the Financial Ombudsman Service, which mediates in unresolved claims, although it adds that such companies still account for two-thirds of all claims. Meanwhile, the Financial Services Authority has fined Bank of Scotland £4.2m for failing to keep proper mortgage records on 250,000 customers. It said the breach was "particularly serious" because of its duration - the problems persisted for seven years. Around 160,000 customers missed out on "goodwill payments" promised by the bank for earlier mortgage rate confusion because the bank's systems were not properly aligned. The latest setbacks follow the collapse of Royal Bank of Scotland's planned sale of branches to Santander, and come as politicians and regulators continue their scrutiny of banks. The Parliamentary Commission on Banking Standards has begun hearing evidence, while the future head of the Financial Conduct Authority has also announced plans to create a new unit that will act as a radar to identify future PPI-like problems. Analysts say the poor sentiment towards banks will make it hard for the government to sell its stakes in RBS and Lloyds in the near term.