Argos owner Home Retail Group and online retailer Shop Direct have been forced to put aside provisions after being pulled into the PPI mis-selling scandal.

Home Retail has made a £25m provision, roughly a quarter of its annual profit, for claims dating back to 2000.

It is a higher provision than it has made for previous PPI payments. A source close to the situation told the Financial Times that previous provisions were too small to be material and in the “single digit millions”.

The claims relate to products bought on credit at Homebase and Argos. The insurance was sold through Home Retail Group’s Financial Services business.

Shop Direct, which owns and Littlewoods, has set up a dedicated team to handle PPI complaints.

The online retailer declined to say how much money it had set aside for the payments, describing it as “not material”.

A Shop Direct spokesperson said: “Our policies only cover small shopping account balances and not large loans or mortgages, so the premiums involved are relatively small.”

The PPI scandal has so far impacted retailers which did their financing in-house, such as Home Retail Group and Shop Direct – both of whom were once part of GUS, the former FTSE 100 retail and mail order group. The bulk of retailers outsourced their credit facilities to banks, which have borne the brunt of the provisions from the miss-selling scandal.