Banks challenge PPI reclaiming in High Court

Former_MSE_Guy

This is the discussion thread for the following MSE News Story:

"They are trying to derail plans to force automatic payback of billions of pounds to victims of mis-sold debt insurance ..."

Read the full story:
Banks challenge PPI reclaiming in High Court

michaels

I don't see what the banks are claiming here. I would have thought that selling an unsuitable product using misleading or factually incorrect information would break the sale of goods act regardless of what specific rules the FSA had in place at the time?

I supported the banks on charges, these were clearly set and out customers were aware, sales advisers making inaccurate or false statements is a totally different situation.

Is there not some legal route whereby the banks could face large fines for bringing unwarranted legal action?

dunstonh

I don't see what the banks are claiming here.

I could understand their earlier complaints about the FSA ruling as that was typical FSA retrospective rule changing. Something IFAs have had to put up with for years but don't have the clout to challenge. The banks do and as PPI is an area that mostly affects them, they have decided they dont like retrospective rule changes. So, I do have sympathy with them on that front. Although they could have picked a better product class to challenge it with as everyone knows how poorly sold many of these PPI cases are.

I hope the banks win from the point of view of retrospective rule changes but I hope they lose because the banks need to be taught that there are consequences to selling and advising incorrectly.

michaels

100% agree re retrospective rule changes but as I said in my first email - I would have thought if a sales person gives misleading or incorrect information during the sale then the sale should be invalid regardless of what specific guidance was in place at the time?

dunstonh wrote: »

I could understand their earlier complaints about the FSA ruling as that was typical FSA retrospective rule changing. Something IFAs have had to put up with for years but don't have the clout to challenge. The banks do and as PPI is an area that mostly affects them, they have decided they dont like retrospective rule changes. So, I do have sympathy with them on that front. Although they could have picked a better product class to challenge it with as everyone knows how poorly sold many of these PPI cases are.

I hope the banks win from the point of view of retrospective rule changes but I hope they lose because the banks need to be taught that there are consequences to selling and advising incorrectly.

Chinky_Chinaman

It's a pity Martin Lewis tell everybody that the PPI ruling was being challenged in court when he appeared on Daybreak TV just before christmas telling everybody that they could be entitled to get their PPI money back from the Banks. He went to great lengths to tell people how to complain and urged them to visit his website for the details on how to reclaim their money etc etc. Everybody else knew that the ruling was being challenged by the banks - that is everybody but himself!!

michaels

As far as I can understand it the rule that is being challenged is whether the banks have a duty to pro actively identify all possible miss-selling cases and inform the customer that they may have a claim for miss-selling.

Not that miss-selling occurred or that either of the following practices are miss-selling:
selling a product without identifying whether it offered protection to the customer in their specific circumstances; or
giving the implication that such cover was a condition of the loan when it was not.

Chinky_Chinaman wrote: »

It's a pity Martin Lewis tell everybody that the PPI ruling was being challenged in court when he appeared on Daybreak TV just before christmas telling everybody that they could be entitled to get their PPI money back from the Banks. He went to great lengths to tell people how to complain and urged them to visit his website for the details on how to reclaim their money etc etc. Everybody else knew that the ruling was being challenged by the banks - that is everybody but himself!!

Joe_Bloggs

The FSA can not seriously bite the hand that feeds them. I predict a gallant show/shower similar to what happened when the OFT tried to take on the banks.
As I recall the OFT won then won again and then lost. This litigation thing is not a game of two halves.
J_B.

tifo

what's the point of having regulations and laws if the banks want to change everything they don't like, and that's by using taxpayer's own money to screw the taxpayer. Maybe we shouldn't have bailed them out .... they're laughing all the way to the 'bank'.

davidgmmafan

Part of me thinks the banks object to any suggestion of wrongdoing, even when they are banged to rights. I can understand, in principle, the objection with retrospective rulings. However the alternative may well be worse. If they potential for retrospective action is removed (and I don't imagine it would be invoked very often at all) then what you are saying to the banks and similar is go for it. Screw everyone over as much as you can, don't follow the spirit of the rules. Go get what you can.

Then we'll change the rules later, to prevent it happening in future (until you find another workaround) and you can keep all you ill gotten gains.

This is pretty much what happened with bank charges. You'll notice they've fallen generally speaking. Still waiting for someone to explain how, in a competitive market, the charges became so high and the conditions so uniform...

dunstonh

what's the point of having regulations and laws if the banks want to change everything they don't like,

Thats the argument the banks are using against the FSA. i.e. If there are rules you cant change and retrospectively apply them. They should be applied from that point onwards.

that's by using taxpayer's own money to screw the taxpayer.

where is the taxpayer involved?

Maybe we shouldn't have bailed them out

Thats not a valid argument as the taxpayer did not "bail out" most of the banks.

Alpine_Star

dunstonh wrote: »

I could understand their earlier complaints about the FSA ruling as that was typical FSA retrospective rule changing. Something IFAs have had to put up with for years but don't have the clout to challenge. The banks do and as PPI is an area that mostly affects them, they have decided they dont like retrospective rule changes. So, I do have sympathy with them on that front. Although they could have picked a better product class to challenge it with as everyone knows how poorly sold many of these PPI cases are.

I hope the banks win from the point of view of retrospective rule changes but I hope they lose because the banks need to be taught that there are consequences to selling and advising incorrectly.

The issue of whether the FSA rules are retrospective are not as clear cut as you would have it. The FSA are arguing that the ''new'' rules are not new at all and are merely more detailed clarifications of the existing rules.

What is not in any doubt is that in attempting to overturn FOS rules (published in 2008) the BBA is seeking to quash them - retrospectively.

So from a retrospective perspective, the words 'pot', 'kettle' and 'black' can be safely be applied to the BBA.