MSE News: Banks lose crucial PPI judicial review

edited 20 April 2011 at 2:56PM in Reclaim PPI & other insurance
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  • Ye thats what i expect to happen Jim. they will probably drag it out as long as possible!

    Q) If by some unbelievable miracle they just take it on the chin (unlikely) Does that mean the claims will be dealt with quicker? i.e not take the best part of a year to decide on a refund?
    Carpe Diem
  • MrLeeLeeMrLeeLee Forumite
    163 Posts
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    Surely this will just go the same way as the bank charging case?

    They'll appeal at every opportunity, dragging their heels and when it gets to the final appeal, despite every other decision going against the banks, the big boys (who no doubt have a lot of friends in high places who would be affected by this) will decide in favour of the banks?

    Sorry to be so negative and I would love to be wrong (even though I have no personally interest in this as I am not affected I love seeing the banks getting a kick in!) but to me it's just the way it works.
  • I cannot understand why it has taken so many years for this problem to be raised by the FSA. If this was a small business such as a mortgage broker or IFA I am sure they would have had quicker & more severe punishment with jaw dropping fines:mad: Again the banks rule supreme when it comes to making up the rules.

    I am however a bit worried about bashing the poor banks now that us the taxpayer seem to indirectly have an interest in their welfare.
    Maybe the regulator could impose a 3 year longstop as they did with endowment misselling scandal to prevent people from claiming. This might help the banks out a bit & see a few more consumers out of pocket.:rotfl:

    The worst part of this is how these banks , loan sharks, brokers are able to simply keep there heads low & hope people dont complain while they continue to collect huge commission payments from every monthly payment. With the pension misselling scandal, companies were forced to write to all policyholders & review every sale, & then offer compensation. Surely this is the only acceptable outcome for the consumer.

    It appears most consumers were too disinterested/or lazy to read the policies in the first place & decide for themselves if they actually needed them or question the advice given, being usually just happy to simply get a loan regardless of costs. Clearly those same consumers may be equally lazy in realizing they can claim compo that they may well deserve, or perhaps too scared to upset their bank incase they might get refused for that next loan or overdraft!
  • edited 20 April 2011 at 4:26PM
    ConsumeristConsumerist Forumite
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    edited 20 April 2011 at 4:26PM
    I must confess I don't quite understand how the FOS has allowed itself to become clogged-up by the banks' failure to co-operate with claims disputes. In court, if the other side doesn't show up then they lose by default; why isn't this happening at the FOS?
    >:)Warning: In the kingdom of the blind, the one-eyed man is king.
  • I must confess I don't quite understand how the FOS has allowed itself to become clogged-up by the banks' failure to co-operate with claims disputes. In court, if the other side doesn't show up then they lose by default; why isn't this happening at the FOS?
    What else might one expect of the Fobbing-Off Service?
  • Now, banks must lift this hold though they're refusing to for now. In that case, it's time for the regulator, the FSA, to get meaty on their backsides.

    If banks won't follow the rules, they shouldn't be allowed to play the game at all. Threatening big fines is irrelevant – a punishment charge of £10 million means nothing to banks if it saves them £1 billion in payouts.

    The only credible threat is suspending their licence to do insurance business – nothing else will scare them into compliance and it should be done right away.
    Does anyone really believe that the Fundamentally Supine Authority will even threaten such action?
  • ConsumeristConsumerist Forumite
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    The only consolation for the customer in all this is that the longer the banks delay, the higher the interest compensation will be at 8% pa. - which you can't get in a savings account at the moment.
    >:)Warning: In the kingdom of the blind, the one-eyed man is king.
  • marshallkamarshallka Forumite
    14.6K Posts
    The only consolation for the customer in all this is that the longer the banks delay, the higher the interest compensation will be at 8% pa. - which you can't get in a savings account at the moment.
    That is of course providing the banks lose again.

    Looking at this in a warped way, the banks could appeal, the consumer could lose out and all the time whilst waiting for the court case again more and more people are put off reclaiming and more complaints become time barred.

    Lets hope that justice is had and that consumers are redressed in a class action whereby they are written to and told they have (or may have) been missold and a cheque is on the way. Collective redress. That is the best outcome.
  • Petef_2Petef_2 Forumite
    15 Posts
    Lets face it the regulator should have stepped in long ago to stop this but didn't!

    So while they (the Banks) can get away with it they will, like selling sub prime mortgages to each other!

    It's us the customer who always end up paying !!!
  • marshallkamarshallka Forumite
    14.6K Posts
    di3004 wrote: »
    http://www.bba.org.uk/media/article/judgement-handed-down-on-bba-judicial-review

    Judgement handed down on BBA judicial review

    “On behalf of its members, the BBA requested a judicial review of the way in which the industry should handle complaints about PPI sales, as set out in the Financial Services Authority's policy statement.
    “Whilst the UK banking industry has to date implemented every reform on PPI sales and complaints handling required by the regulators, the additional requirements in the policy statement effectively apply new standards to past sales, which we believe go beyond the rules and regulatory requirements which were developed by the regulator over time.

    “It was due to the widespread concerns that the FSA and the Financial Ombudsman Service had not properly applied the law in this area – and only having exhausted all other avenues for resolving the underlying dispute that a judicial review was sought.
    “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. Customers who are considering making a complaint or who have a specific query about an existing complaint should contact their bank in the first instance.”
    This is from the Ombudsman site today.legal challenge ("judicial review") on payment protection insurance (PPI)

    Judgment was handed down by the High Court in London on 20 April 2011, following the legal challenge ("judicial review") brought by the British Bankers Association (BBA) – on behalf of a number of high-street banks – against the Financial Ombudsman Service and the FSA on the approach to handling PPI complaints.
    The judgment endorses the approach taken by the ombudsman and the FSA. The banks have 21 days to consider whether to appeal.
    The ombudsman service continues to handle large volumes of PPI complaints from consumers. Since the BBA launched its legal challenge in October 2010, the ombudsman has been receiving up to 5,000 PPI complaints each week.
    This means that the ombudsman service has received over 200,000 complaints in total about mis-sold PPI policies – upholding 3 out of 4 cases in favour of consumers.
    The lack of cooperation from some financial businesses has made it difficult to progress PPI cases since this legal challenge was launched. However, the clear-cut judgment means that banks and other financial businesses should now be in the position to deal promptly, efficiently and fairly with their customers' PPI complaints.


    Does this mean that FOS/FSA are expecting firms to look into complaints now and deal with them promptly or will it be just as it has been for the last how ever many months? Seems the bbi say different and will they still be putting on hold cases that were most likely not affected by the JR and getting away with it still.
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