A high street bank is faced with paying customers up to £1million in compensation after it breached rules connected to payment protection insurance.

Barclays failed to send a reminder to more than 1,000 customers about their insurance policies, which it must do by law annually.

Payment Protection Insurance - or PPI - is insurance that can be taken out with a loan, credit card or other financing option that would cover some or all of the repayments in the event that someone could not work and pay back they money they owe.

Each year all PPI providers must send reminders to customers that clearly set out the cost of their current policy, the type of cover they have while also reminding them of their right to cancel it.

Barclays, says the Competition and Markets Authority, failed to send reminders to more than 1,000 people with PPI between 2014 and 2017.

These 1,306 customers, who had both a mortgage and an associated PPI policy with the bank, had moved house and notified Barclays of their new address but the company - says the investigation - 'failed to act properly on this information' which meant customers didn't receive their yearly reminders.

The breach, which was discovered in 2021, means that some customers may have kept policies for longer than they needed them or stopped checking for cheaper or better alternatives, which in turn could have cost them money.

The payout, of up to £1m to those affected, is made up of refunds and goodwill payments, and comes after Barclays reported the breach to the CMA in October 2021.

Adam Land, Senior Director of Remedies, Business and Financial Analysis at the CMA, said: "Barclays will pay customers up to £1 million after breaching the CMA’s PPI Order.

"That’s an average payment of around £750 per customer, which is particularly important as the cost-of-living crisis bites. We will now work with Barclays to ensure these payments are made to customers.

"It’s important that all PPI providers take notice – we won’t hesitate to take action, as we have done here, if customers have lost out."