MSE News: Banks put PPI claims on hold in defiance of regulator

TheBigDog

OK - the internet is rife with all sorts of posts from people panicking about what if the banks win and then whats going to happen - are we all going to lose out? are we going to be stiched up again? it's another bank charges!

Lets put it all into perspective here.

Lets first of all look at the differences between the bank charges case and the PPI mis-selling case. The differences here are striking to say the least.

The bank charges case fell onto one narrow point of law - Schedule 6(2) of the UTCCR 1999. If the Supreme Court decided that bank charges were penalty charges, then it allowed the OFT to determine them for fairness. If they weren't penalty charges, then the OFT couldn't test them for fairness. Admittedly, in a shock move, Lord Phillips decided that they weren't a penalty charge, and that was the end of the matter. It was one narrow point of law - there was no plan B for the OFT - they put all the chips in the middle of the table and lost. Yes, unfair. Yes, not right - but the Court's decision is the Courts decision. Personally, I have my own opinions as to why the Supreme Court ruled the way it did, but I'm not going to repeat them in a open forum due to libel laws - however - the factors that I believe that shaped the verdict are no longer prevelant in the UK.

The FSA, nor the FOS for that matter, fancied the bank charges case either because it was such a grey area of law - there hadn't been any FSA or FOS test case on bank charges and I think they were relieved when the banks appealed because they didn't half agree to a waiver quickly on the matter to stop the cases going into them.

So, just to recap - one singular point of law and no FSA/FOS test case and no appetite from the Regulator to get involved.

Lets look at PPI. Firstly, a number of points of both common and consumer law coming into play, but - predominately - the Financial Regulators own code of conduct rules being broken. Both the FSA and the FOS are aware of serious mis-selling and serious failings in the marketplace, and they're determined to clean it up once and for all. This is why we've seen upteen investigations, upteen fines for mis-selling and 3 Thematic Reviews. A full scale Competition Commission enquiry, which found in favour of the consumer in banning point of sale PPI, which was upheld when Barclays appealed. The FSA know this is the biggest financial mis-selling scandal of all time and that's why they issued PS10/12. Yes, it was that bad, the FSA published yet another guide which they felt was fair on the industry and consumer alike. The only reason why they published that statement was that they wanted to protect consumer rights and they were aware of serious failings in the marketplace. Both the FSA and the FOS have got the stomach for a fight here and they ain't going to back down.

Now - let's take the doomsday scenario here. Lets say the banks win - I'll re-iterate - I don't think that they will win, because if one little CMC owner like me can find so many inaccuracies and points of contention in the BBA's claim - then the real experts at the FSA are going to find loads more. The FSA and the FOS will give Delme the bullets he needs to shoot the banks down in Court.

As a side issue - how confident I am is this: I only do Financial product mis-selling - I don't do personal injury etc., so financial mis-selling is all I'm licenced for (and to be honest - it's all I know). 99% of all my current cases involve PPI mis-selling so I've got huge exposure. I'm also a sole trader, so if it goes wrong - I'll go bankrupt. For the record - I'm not jumping ship, I'm not going to do anything else and I'm not going anywhere. Maybe that might give you a bit of an idea where I stand.

OK - if the banks win! Well, all that happens is that the FSA will have to drop PS10/12 and the FOS will have to review their policy statement. Where does this leave us? It leaves us back in 2008. Even if the banks do win - it doesn't stop complaints being made, it doesn't mean that PPI wasn't mis-sold and it doesn't mean that compensation cannot be awarded.

Yes, the complaint letters may have to be specific to ICOB, GISC etc, but the FOS will ALWAYS rule on what's 'fair and reasonable'. If the banks win, will the FOS think that ppi mis-selling is a figment of their and the FSA's imagination - no they won't, they'll revise their guidelines and carry on adjudicating. One option open to them is to bring common laws into the equation - they may want to state Misrepresentation into their argument - but one things for sure - they're not going to let it go.

I've looked back on the past 3 weeks this afternoon and tried to piece together the puzzle. It appears as though theres no rhyme or reason from the banks as to what cases are, or aren't affected, and there's no direction from any of them. They're happy to sit there at the moment and do nothing, because it suits them not to have to pay out. It's my belief that this is nothing but a stunt from the banks to stop the cash flow into CMC's so they'll eventually go bust and it puts off people doing it themselves. Disgraceful, but, unfortunately, I think it's true.

All eyes are on the FSA and the FOS to see what they do next. I dont think that they can sit back and do nothing for more than another fortnight. The FOS know if nothing changes, then they're going to receive EVERY ppi complaint in the country, and they know they'll be swamped.

The FSA bought out PS10/12 to alleviate the pressure on the FOS as they were sick and tired of the amount of PPI complaints they were receiving that hadn't been investigated properly. They sure as hell ain't going to allow tens of thousands more to come through their doors.

I think theres a sting in the tail coming, and I think it's coming soon. I think you need look no further than whats happening out there to realise whats going to happen next. Santander don't want to know - is it publicity or is it because one of their brands has been hit with the biggest fine for ppi mis-selling and that they can't afford to get involved? RBS - under investigation by the FOS - have started sending uphold letters out. It leaves Lloyds, Barclays and HSBC and other fringe members who have yet to be fined. Maybe they think they can get away with it, or maybe, it might be a cheaper option for them to pay a monster fine when the FSA can prove that no final responses are coming out of there or any acknowledgement letters either.

As the Bon Jovi song goes - 'Keep the Faith'

Regards,

TBD.

debt55

Bigdog - why not issue proceedings on all cases that are single premiums? 120 pounds at the online Moneyclaim site, use the Nemo poc.. will the Banks defend that?

There is no stay on claims in the courts as there was with bank charges.

The way forward and the way this site should be focusing more attention on, in the vein attempts to "help" the man on the street.

How can a bank defend against a mis-sold single premium?

Alpine_Star

TheBigDog wrote: »

OK - the internet is rife with all sorts of posts from people panicking about what if the banks win and then whats going to happen - are we all going to lose out? are we going to be stiched up again? it's another bank charges!


The bank charges case fell onto one narrow point of law - Schedule 6(2) of the UTCCR 1999. If the Supreme Court decided that bank charges were penalty charges, then it allowed the OFT to determine them for fairness. If they weren't penalty charges, then the OFT couldn't test them for fairness. Admittedly, in a shock move, Lord Phillips decided that they weren't a penalty charge, and that was the end of the matter.

TBH I don't share your view about the internet being rife with people panicking about the banks winning - I haven't seen it. I think people understand that even if the banks win the status quo will remain ie it will have no effect on claimants existing rights.

I have to say that your summary of the Supreme Court judgment is - to put it mildly - a tad off the mark. The Supreme Court didn't consider the issue of penalties as this was not the subject of the appeal by virtue of the determination on penalties (in the banks' favour) by Justice Smith in the court of first instance. The banks were hardly likely to appeal a previous judgment that had gone their way.

In fact if you read the Supreme Court's own summary of it's judgment, the word 'penalty' doesn't feature at all: http://www.supremecourt.gov.uk/docs/uksc_2009_0070_ps.pdf

And to think that you run a claims company...

Cardinals

The new CEO of Lloyds from Sept 2011 is going to be Horta Osario - current CEO of Santander.

We already know his views on the JR so perhaps he may take a different approach to the beligerent Mr Daniels.

I note that Mr Daniels enjoyed a £12.1 million pay packet in 2009. Nice.

petecorfu

I agree with thebigdog! i am a CMC also in exactly the same way, at the moment ppi claims are my very existence!
Mr "alpinestar" myself and thebigdog listen every single day to the lies spun by these financial houses and i can tell you now even though we can never prove it, something very VERY underhand went on in the bankcharges case! it stank.
How come we won in the high court and then the appeal court where the master of the rolls denied the banks the right to approach the house of lords because he thought they did not have a case, but then went ahead via another route and won the case??? so we scored 2 goals to there 1 and we still lost! ? So even though the odds are clearly in our favor on the ppi issue we are all still scared from the bankcharges debacle! I had £4 million worth of claims on my books and in one foul (and i mean FOUL) swoop i lost £1 million pounds in 30 seconds!! do you have any idea how that feels???

debt55

petecorfu wrote: »

I agree with thebigdog! i am a CMC also in exactly the same way, at the moment ppi claims are my very existence!
Mr "alpinestar" myself and thebigdog listen every single day to the lies spun by these financial houses and i can tell you now even though we can never prove it, something very VERY underhand went on in the bankcharges case! it stank.
How come we won in the high court and then the appeal court where the master of the rolls denied the banks the right to approach the house of lords because he thought they did not have a case, but then went ahead via another route and won the case??? so we scored 2 goals to there 1 and we still lost! ? So even though the odds are clearly in our favor on the ppi issue we are all still scared from the bankcharges debacle! I had £4 million worth of claims on my books and in one foul (and i mean FOUL) swoop i lost £1 million pounds in 30 seconds!! do you have any idea how that feels???

but no claims are on hold.

surely a large percentage of your claims are post jan 2005?

marshallka

petecorfu wrote: »

I had £4 million worth of claims on my books and in one foul (and i mean FOUL) swoop i lost £1 million pounds in 30 seconds!! do you have any idea how that feels???

The saying goes what you never have you never miss.... FOS is not putting PPI claims on hold and the FSA have said to continue dealing with them so it should be business as usual for you with PPI shouldn't it?

Alpine_Star

petecorfu wrote: »

How come we won in the high court and then the appeal court where the master of the rolls denied the banks the right to approach the house of lords because he thought they did not have a case, but then went ahead via another route and won the case???

It is a myth that Justice Anthony Clarke said that he refused the appeal on the basis that the banks had no case. It is not for a judge to comment on the prospects of an appeal to a higher court. Most appeal applications are refused in the first instance - where the appeal is made to the court handing down the judgment. If the OFT had lost in the Court of Appeal they would have enjoyed the same right to seek leave to appeal directly to the HoLs/Supreme Court as the banks did.

debt55

Put a claim on for my sister-in-law, just a fortnight ago, Halifax loan, she was paid up yesterday.

Don't give up folks.

petecorfu

marshallka wrote: »

The saying goes what you never have you never miss.... FOS is not putting PPI claims on hold and the FSA have said to continue dealing with them so it should be business as usual for you with PPI shouldn't it?

Depends on what you mean by business as usual for me! Yes it is via F.O.S but no its not with the banks and credit card firms (except santander) I'm receiving the "hold" letters from all the banks on all cases!( they are blanket holding everything regardless of whether or not its criteria falls under the judicial review) which gives each case the automatic ticket to go to F.O.S, whereas before i would receive offer letters!
Now comes the whooping great 15 page complaints questionnaire and complaint doc for each case! that you must send to the client to fill in then send back to me to check and then send back to F.O.S and wait 3-6 months for a decision, that then sometimes gets ignored by the bank and you can then have a 2 year wait for an actual ombudsman to review the case!!! so sort of business as usual! lol

I spoke to the press office at the bba yesterday and told them that a halifax employee told me on the phone "nothing new is being looked into, everything is on hold" he just said oh! thats a regulatory matter! The banks are even ignoring the bba's guidance on this matter, that on top of the fsa and fos being ignored! No wonder why i'm anxious about justice prevailing?