The health insurance and protection market covered
Banks forced to look again at rejected PPI complaints
The High Court today ruled banks must look again at hundreds of thousands of PPI cases, following an unsuccessful judicial review by the British Bankers Association (BBA) against the FSA.
It could lead to billions in payouts to consumers who had been missold the policies.
The BBA had launched a judicial review after the FSA said banks would have look again at complaints it had previously rejected.
Earlier this year, the BBA's legal team had told the High Court implementation of the FSA's proposals could cost the banks £3.2bn and it is estimated up to three million people could be affected by the decision.
Following the ruling, the BBA said: "We are disappointed with today's judgment and now need to consider the details of it very carefully as well as next steps, including whether it would be appropriate to apply for permission to appeal.
"Any complaints that are directly affected by the judicial review and therefore can not be decided will continue to be placed on hold until the next steps have been decided.
"We will continue to work closely with the FSA to ensure that all complaints are appropriately handled and customers are not disadvantaged."
The Financial Ombudsman Service has previously warned it could be overwhelmed by PPI complaints as it is currently receiving around 5,000 cases per week.
Despite warnings from the FSA, a number of PPI sellers were refusing to co-operate with the FOS until the outcome of the judicial review.
Reacting to the ruling, the FSA said: "Our primary aim has always been to get proper redress, once and for all, for those with genuine complaints.
"We believe this decision signals the end of years of poor complaint handling and will trigger a dramatic improvement in the way customers are treated when complaining."
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late entry
just back at my desk - the banks won;t worry over this really - if they have to pay every penny back in compensation they will find a way of recouping it quickly - a 10p charge for every cash withdrawal for example...back in huge profit in no time...
Posted by: Alan Royal | Apr 27 2011
Yet again
That’s another judicial review with a negative outcome for the appellants. This time however the banks took the money from their shareholders and the public (as they are bailed out by us) to fund the legal costs. I just hope that those IFAs who so willingly became the dupes and lemmings of those who encouraged them to waste their own money have finally learnt a valuable lesson.
Posted by: Harry Katz | Apr 21 2011
Rejected PPI complaints
Let me first say I have no truck with the way banks treat their customers, but I hope that we do not go down the endowment miss-selling route where companies just rolled over and paid compensation. Its surprising how some clients have a memory better than an elephant and can remember word for word of a meeting years ago. Compensation was paid out and instead of paying it off the mortgage, new cars,holidays and kitchens were purchased.
Posted by: Terry | Apr 21 2011
Banks Forced !
Please Roger hold off with giving the banks credit for a while. It is only a judicial review which they have lost. They have not given up yet they have got their legal beagles working overtime trying to assess whether to appeal or not. They did similar over bank charges if you remeber. I bet they do.
Posted by: John Smyth | Apr 20 2011
At least this is a start
Credit where credit is due. Finally the Banks have been brought to book. However, what happens to the Directors who implemented all these PPI initiatives. What happens to them and where do they go ? Previous comments are quite correct about the population of ex Bankers within the FSA, which is clearly a distracting the ability of the FSA to regulate financial services correctly. The FSA are certainly biased in allowing the Banks to get away with poor practices for so long. It is a disgrace ! Pity that Sants does not grasp the nettle but there again that would spoil his pay packet for the future !
Posted by: Roger | Apr 20 2011
So they have lost the case
no suprise there. So what happens when they refuse to pay the FOS bill for the complaint handling and as the FOS have intimated they then try to take the money from the rest of the levy payers (including IFAs) and we refuse to pay to cover the banks refusal to pay? Oh yes, what happens is we'd have our authorisations removed, whilst the banks would continue to refuse to pay and continue to be authorised. One rule for the banks and another for us...
Posted by: Nameless | Apr 20 2011
Banks Forced !
They just can not bring themselves to treat customers fairly can they. They still believe that what they have done and are doing on the sale of PPI is OK. Nothing wrong with robbing the public is there gov? There pretty dumb and deserve it. Just think the FSA is chocka block full of exbankers who think just like them but they regulate the IFA community and invented TCF.
Posted by: John Smyth | Apr 20 2011
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