PPI bill likely to be largest in modern history Smaller lenders have also set aside money to compensate customers. Nationwide, the UK's biggest building society, set aside £103m in the year to April 2012, while the Cooperative Bank set aside £90m in 2011. The background Payment protection insurance (PPI), or "loan protection" was designed to cover debt repayments in the event of illness or redundancy. The issue of PPI being a poor-value product was first raised in 1998 by consumer magazine Which?, though the FSA didn't issue its first report on poor selling practices until November 2005. In 2011, the High Court passed a ruling that meant Britain's banks were forced to re-open thousands of PPI mis-selling claims. You can view a full timeline of how the scandal unfolded here. The biggest scandal ever? Britain's financial services industry is no stranger to mis-selling scandals. In 1994, the Financial Services Authority began a review of the mis-selling of personal pensions. It was aimed at people wrongly sold pensions between 29 April 1988 and 30 June 1994. Mis-selling occurred when people who would have been financially better off at retirement in their employer's pension scheme were advised to leave or not join their employer's pension scheme. By the end of June, 2002, 1.7 million consumers had their cases reviewed, and almost £12bn had been paid out in compensation. The estimated final bill was £13.5bn. If JP Morgan is right, the amount paid out in PPI mis-selling claims will surpass £13.5bn, making it the largest compensation scheme in the modern history of the British financial services industry.