MSE News: Banks defy FSA on new PPI rules

As somebody who is in the middle of a PPI reclaim even I don't think banks should have to go back and review past PPI sales.

I also loved this bit from the article:

Where there is a systematic problem, such as mis-selling, they are expected to contact affected customers and offer refunds

I am sure that banks are going to declare that they have a "systematic problem!" Hasn't one of the main complaints been that banks are automatically rejecting PPI reclaims anyway? Who really believes they are going to go back through their past sales and declare they were mis-sold?

tifo wrote: »

so what can consumers do if a bank won't deal with a PPI complaint?

i am sure they are counting on the customer ultimately taking court action and they would then have the case stayed until the end of the JR.

but if the FOS make a decision asking the bank to refund the consumer, then this is legally binding so what would happen if the consumer took court action to enforce this decision (and the bank asked for a stay)?

You answer your own question; FOS' decisions are legally binding upon the business, so there's no need for anyone to put in a court action to "enforce" a decision they'd already made - to do so would be a waste of time and money. If someone were to get a stay in such circumstances then that'd be their own silly fault.

JuicyJesus wrote: »

You answer your own question; FOS' decisions are legally binding upon the business, so there's no need for anyone to put in a court action to "enforce" a decision they'd already made - to do so would be a waste of time and money. If someone were to get a stay in such circumstances then that'd be their own silly fault.

The FOS cannot force the bank to pay even after they've made a decision in your favour. To enforce their decision, you would need to take court action and say why it is legally binding on the bank.

tifo wrote: »

i am sure they are counting on the customer ultimately taking court action and they would then have the case stayed until the end of the JR.

On what basis could a court claim get stayed pending the outcome of the Judicial Review?

Any consumer litigation would be unaffected by the JR. The issues under consideration in the JR are regulatory matters between providers and the regulators and don't concern any points of law regarding PPI litigation.

tiggrae wrote: »

The FOS CAN force the bank to pay, it's part of the Financial Services and Markets Act 2000 which established the FOS and part of their licence to operate.

No, the FOS does not have any enforcement powers, only the power to make a decision. It is then up to the FSA to take regulatory actions against the bank but ultimately the consumer's choice to take the matter to court (the only place it can legally be enforced).

Extracts from the FOS:

Parliament set up the Financial Ombudsman Service to decide complaints – not to act as a law enforcer or a bailiff.

First, Parliament gave the regulator, the FSA, a wide range of powers to deal with the financial businesses that it regulates – and which are covered by the ombudsman service.

Secondly, Parliament made ombudsman decisions “legally enforceable” in court – which means that consumers have the back-up of the law of the land, to support decisions by the ombudsman in their favour.

Parliament did not give the ombudsman enforcement powers – that is not our job. Instead, Parliament made legal provision for consumers themselves to be able to enforce our decisions in court.

The process is similar to enforcing a judgment where a case has been heard in court.

The Financial Services and Markets Act 2000 sets out the basis on which the ombudsman’s decisions may be enforced in the courts.