The woman, who has chosen to remain anonymous, bagged the huge sum after it was ruled she has been mis-sold PPI on two MBNA credit cards and another from HSBC.

She had reportedly owned one credit card since 1995, which is why she was due such a huge lump of compensation.  As well as receiving back the exact amount she had paid in PPI premiums, she was also awarded a huge chunk of interest that the money could have generated over 17 years.

According to bbc.co.uk, the woman called into BBC Radio 4 programme ‘Money Box’ over the weekend to share her story with others who feel they might be due compensation. She had followed advice issued by the show’s presenters with regards to claiming for mis-sold PPI.

Thisismoney.co.uk report that the woman remembers being sold the credit cards and that she felt somewhat pressured into taking PPI along with them.

“I got the impression that the application was more likely to be accepted if I took the insurance, and I think it was implied,” she said.

Mike Dailly, who was hosting ‘Money Box’, predicted that the case could convince others who were mis-sold PPI to claim compensation.

Martin Wheatley, who will lead the organisation when it takes on its regulatory powers this year, spoke at the Building Societies Association Conference 2012 in Manchester this week and revealed that interventions will be based on an individual “judgement call”, reported mortgageintroducer.com.

The FCA is under pressure to play an active role in regulating firms to ensure events such as the payment protection insurance (PPI) scandal do not occur again – that episode of mis-selling has led to a huge number of people getting compensation after choosing to reclaim PPI costs.

Mr Wheatley said: “Under the new model, what I would expect us to do would be to, at a relatively early part of the process say ‘we know enough to know there’s a problem’, not that we know everything. We know enough to know that without strong intervention that problem won’t go away.”

New guidelines on when the FCA will intervene have just been released by the Financial Services Authority, according to ifaonline.co.uk. Among the powers open to officials will be the ability to act without first consulting the public, although this will need to be justified by investigators, who must show why it was in the consumer’s interests to do so.

According to mirror.co.uk, the 63 per cent rise was implemented in response to a significant increase in mis-sold PPI claims in the first three months of 2012, with the announcement coming in its latest financial update as previously predicted.

The company admitted that the scale of the PPI scandal is still causing a “degree of uncertainty” regarding the eventual cost to the banking industry, although HSBC troubles did not stop it recording profits of $6.8 billion (£4.2 billion) in the first quarter of 2012.

Banking correspondent for telegraph.co.uk Harry Wilson pointed out that this figure represents its underlying pre-tax profits before a huge accountancy charge has been taken account for. A $2.6 billion payment means that pre-tax profit actually dipped year on year.

He went on to note that HSBC is keen to improve profitability, which is why it is cutting jobs around the world and ending several commercial ventures.

Stuart Gulliver, chief executive of the company, said: “We continued to make good progress implementing our strategy, with 11 transactions to dispose of or close businesses announced since the start of 2012, and we continued to position the business for growth with increased revenues in Hong Kong, Latin America and the rest of Asia-Pacific against the previous quarter.”

A new study from ING Direct Bank has indicated that the average balance in a traditional savings account has risen by 18 per cent in the first quarter of the year and that much of this extra money has come from PPI payouts.

According to telegraph.co.uk, the study estimated that £5.6 billion worth of compensation for mis sold PPI will be paid out this year and that around 34 per cent of this will be stored in traditional savings accounts.

It was also predicted that successful PPI claims will boost high street spending. The researchers estimated that £1.15 billion (20 per cent) of compensation from PPI claims will be spent on consumer goods.

Commenting on the research, ING economist James Knightly claimed that the majority of Brits were keen to replace any savings they may have been forced to spend during the tough economic climate.

He told thisismoney.co.uk: “The household finances of millions of Britons will be boosted by billions of pounds of compensation via PPI refunds, roughly a third of which will be put into savings – as consumers replenish reserves they have had to dip into in previous years.”

The bank is set to announce its quarterly results today and it has been forecast that it has also not set aside enough cash to adequately cope with all the compensation claims being made.

It has already put away £400 million to give to customers who had been mis-sold PPI but it is expected to add an additional sum between £0.3 million and £0.5 million, as Britain’s other major banks have done in the past week.

Thisismoney.co.uk report that the success of PPI claims companies has partly caused the increase in provisions across the board.

A large proportion of successful claims are being made by these companies on behalf of customers who might have otherwise had a hard time claiming compensation that is rightfully theirs.

The added provision will do little to harm HSBC’s overall performance throughout the first quarter of 2012. According to telegraph.co.uk, they are expected to report pre-tax profits between £3.2 billion and £3.9 billion.

The Royal Bank of Scotland has currently made the biggest addition to its mis-sold PPI compensation fund, upping its provision from £950 million to just over £1 billion on Friday.  

UK Car Group (UKCG) has been slapped with a £91,000 fine regarding the mis-selling of PPI made by its brand representative, CC Automotive, which traded under the name Carcraft.

Rochdale-based Carcraft hails itself “the UK’s leading car supermarket” and arranged credit agreements to help consumers purchase vehicles. Many of these personal loans included PPI.

However, the FSA deemed UKCG negligent in ensuring the advice provided by Carcraft to customers was appropriate. While UKCG took steps to address concerns that were flagged in internal audits, Carcraft failed to sufficiently record the advice that it gave to car-buyers. This then raised questions over the competence of staff members that sold PPI.

UKCG delivered training to tackle this but nevertheless, the FSA felt overall that UKCG ‘fell short of the standards expected’ leaving customers at an increased risk.

The action for which the fine relates concerned the lack of monitoring PPI sales made between April 2007 and September 2008. By demonstrating full compliance with the investigation, UKCG has been given a 30 per cent discount for agreeing to settle the issue in the early, otherwise the full amount due would have totalled £130,000.

Commenting on the case, Tom Spender, FSA head of retail enforcement, told moneymarketing.co.uk: “The risk of consumer detriment arising from the sale of PPI has long been highlighted by the FSA and this case emphasises the need for authorised firms, whether acting in their own right or as principals of appointed Representatives, to ensure their own compliance systems and controls are robustly monitored and implemented effectively.”

The bank is expected to announce that they have made an additional provision of £125 million for victims of mis sold PPI to claim back alongside their first quarter results on Friday. However, no-one from the bank has made an official comment on the rumours.

According to reuters.com, the announcement would take the total amount of compensation set aside by the bank over the £1 billion mark and the amount owed by state banks to almost £5 billion.

A significant proportion of this money has been claimed by PPI claims companies, who allow customers to receive compensation without any significant demands on their time being made.

It would appear that all of Britain’s major banks have grossly underestimated the cost of compensating every customer that had been sold PPI over the last decade or so.

Reacting to the latest news, an FSA spokesperson told sky.com: “PPI is one of the biggest mis-selling issues in recent years. Millions of people bought these policies and many of them may have been mis sold. Customers have a right to complain and have their complaint dealt with properly and quickly.”

Writing for scotsman.com, Terry Murden accepted that the National Australia Bank (NAB)-owned organisation did not need a government bail-out during the financial crisis, but this does not mean they are “good”.

He pointed out that the company still partook in the mis-selling of insurance and now faces compensation requests from people keen to reclaim PPI costs. In his opinion, Clydesdale Bank has not come out unscathed, despite the way it initially reacted.

Mr Murden explained that the company had claimed to be different from its rivals, which has turned out to be a “fallacy”. He said: “The holier than thou stance that its bosses took as Royal Bank and Lloyds came crashing down is now coming back to haunt them.”

The columnist also criticised the parent company NAB for its decision to make cutbacks in the UK, suggesting the policy has a hint of short-termism about it.

While jobs look set to be lost over Clydesdale Bank’s recent performance, an investment specialist suggested to thisismoney.co.uk that NAB may be preparing to sell the brand.

Andrew Martin, a portfolio manager at Alphinity Investment Management, said: “They’re focusing on the good bits …  and ultimately trying to make that business a lot more profitable and potentially one day in the future more attractive to someone else, would be my guess.”

The move takes the total fund set aside by the banking group to a massive £3.6 billion echoing similar actions taken by other banks that have also been found guilty of PPI mis-selling.

Lloyds – which is Britain’s biggest bank in terms of customers, according to the Reuters news agency – said that it allocated the funds to cover compensation following a sharp spike in claims in February and March. The bank is par-owned by the government (40 per cent) and also reported pre-tax profit losses of £288 million for the first three months of 2012; down nine per cent.

Chief executive Antonio Horta Osorio stated that the group has a “long and difficult” recovery ahead of itself this year, following what it expects to be a “reasonably flat” economy.

Thousands of job losses at the bank have already been announced and large parts of the group’s international operations will be sold off as part of a strategic review. In total, 632 branches will be sold in a move ordered by EU regulatory authorities. The sale must be completed before November 2013.

Owner of the financial brands National Australia Bank (NAB) made the restructuring announcement as the firm published its results for the six months to March 2012, showing the two companies incurred losses of £25 million in total, reported yorkshirepost.co.uk.

NAB chief executive Cameron Clyne blamed the job losses on the way the UK economy has struggled, yet the financial statement shows that £120 million had to be put aside by the firm for covering payment protection insurance claims.

The way the organisation has conducted itself has not impressed workers union Unite, with national officer David Fleming saying: “Unite finds it disgusting that the company decided to release a statement from Australia in the middle of the night so UK staff across Yorkshire and Clydesdale banks would wake up to hear that their jobs are being cut through the morning news reports.”

According to bbc.co.uk, the restructuring programme will see about 1,400 jobs lost over the coming three years as the firm seeks to pull out of commercial property lending to refocus its efforts on consumer and small business lending.

Business editor at the resource, Robert Peston, suggested that the number of staff losing their jobs could have been fewer if NAB accepted a takeover offer earlier this year from NBNK, citing a source at the potential buyer.