Scale of PPI mis-selling overtakes private pensions scandal, says Which? LLoyds Bank has set aside money as compensation for PPI mis-selling. If claims continue at current rates, it will have spent its provision by March. Photograph: EPA Payment Protection Insurance mis-selling has become the biggest scandal to hit the banks as the money set aside to deal with it reached £12.3bn, overtaking the private pensions scandal of the 1980s and 90s, according to Which? This total is likely to increase, the consumer magazine said, because if claims continue at current rates Lloyds Banking Group will have spent its £5.3bn provision by March. It appears that the careers of the major players involved with Lloyds at the time have barely been affected, though they have faced some bonus clawbacks. Eric Daniels, the former chief executive, has managed to keep the £5.5m he accumulated in cash bonuses between 2003 and 2007 when mis-selling was at its height. Since he left last year, the bank has managed to claw back or withhold £2.5m in more recent bonuses from Daniels. The former head of retail banking, Helen Weir, was also denied her £1.5m bonus but the humiliation did not dampen her career prospects. She is currently chief financial officer of John Lewis, earning around £650,000, and sits on brewer SAB Miller's board as a non-executive director, earning another £80,000. Truett Tate, the former head of corporate banking, was denied his bonus due to the PPI scandal, the HBOS merger and failure to meet performance criteria. Today he sits as chairman of Arora Holdings - the owner of hotels near various UK airports - and is a non-executive director of insurance firm Towergate. Finally, Archie Kane, the former boss of its insurance arm, was also told he would miss out on his bonus. He is now the newly-appointed governor of the state-controlled Bank of Ireland. The reliance on PPI insurance sales was at its highest in 2007, when analysts estimated 14% of Lloyds' group profits were generated from the product. This was despite the Citizens Advice Bureau filing a "super-complaint" to the Office of Fair Trading in 2005 and the Financial Services Authority having already fined several smaller firms for mis-selling. In 2007 Daniels saw his salary increase 9% to £960,000 and his cash bonus rise 24% to £1.8m - the biggest payout during his nine-year tenure as chief executive. Since all the clawbacks by the bank have been made through withholding shares due as longterm incentive plans, his cash pot will remain unscathed. Peter Vicary-Smith, Which? chief executive, said the banks are still in denial about the true scale of the scandal. He said: "Their piecemeal approach to topping up provisions is an inadequate response to what is now the biggest financial mis-selling scandal of all time." Banking analyst Ian Gordon at City broker Investec said Lloyds has been hit the hardest because it pushed the products more than anyone else. He said: "Lloyds have the number one position in unsecured personal loans, which were simply unprofitable without selling PPI. In 2007, PPI sales were 14% of total group profits. Lloyds taught their staff to say: 'We recommend this product to all our clients.' No product should be recommended to all customers and therein lies the problem. And as the provisions continue to rise, Gordon believes the bank could look at further clawbacks against its executives. If you listen to what Lloyds said in 2011 when they took the initial £3.2bn charge - that was used for a pretext for making a clawback on 12 executives. You would have thought if the same logic is applied there might be something similar down the line.