MSE News: Banks lose crucial PPI judicial review

edited 20 April 2011 at 2:56PM in Reclaim PPI & other insurance
48 replies 8.5K views
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  • Kilty_2Kilty_2 Forumite
    5.8K Posts
    Free banking took a kicking with the bank charges case - ding ding next round......
  • Petef wrote: »
    Lets face it the regulator should have stepped in long ago to stop this but didn't!
    Therein lies the banks' argument.
    If that is the whole of their argument - that they were hitherto not expressly forbidden from selling possibly useless insurance by means of untruths and deception - they really do not seem to have much of a case
    The FSA should have put rules in place at the time, not years later and backdated them.
    When was it actually lawful to use untruths and/or deception to sell insurance?
    The banks do have a point. It is a bit like putting a speed limit in, backdating it and then retrospectively fining drivers.
    Nonsense - it's more like a shoplifter finally getting nabbed at Boots, but also being charged for all the other thefts they'd committed that day.
  • Alpine_StarAlpine_Star Forumite
    1.3K Posts
    Part of the Furniture 1,000 Posts Combo Breaker
    Therein lies the banks' argument.

    The FSA should have put rules in place at the time, not years later and backdated them.

    The banks do have a point. It is a bit like putting a speed limit in, backdating it and then retrospectively fining drivers.

    Precisely what rules do you think have been ''backdated''?

    I'd genuinely be interested to know.
  • Precisely what rules do you think have been ''backdated''?
    The rule under which the FSA "unfairly" insists that suckers are given a fair chance?
  • slenderkittenslenderkitten Forumite
    1K Posts
    Part of the Furniture 500 Posts Name Dropper Combo Breaker
    Forumite
    while everyone else rubs their hands with glee for getting one over on the banks, i'll sit here patiently waiting for the banks to get us back with MORE FEES; some way to get their money back.

    sorry but they WILL invent some other way as they DON'T like to lose! i hope they wont levy a charge to have a bank account, like they do in some eu countries.

    either way the public WON'T win! unless you keep your money under your mattress and want no interest on your money! the government are spineless and couldn't careless about the public otherwise they would govern the banks PROPERLY!
    My Signature is MY OWN!!
  • But won't the customer reclaiming still have to prove it was mis-sold?
    When I tried with Nationwide they basically told me I signed the form so therefore I agreed to it. When I replied saying we signed because we were told it wasn't optional and that we had to have it otherwise our loan application would be rejected they told us we had to prove that is what was said to us :angry:
    Nothing to report:p
  • src007src007 Forumite
    420 Posts
    Therein lies the banks' argument.

    The FSA should have put rules in place at the time, not years later and backdated them.

    The banks do have a point. It is a bit like putting a speed limit in, backdating it and then retrospectively fining drivers.

    That is not to pass comment on the banks activities but it really is no way for a regulator to behave.

    :rotfl::rotfl::rotfl:

    What more has to be shown, that would change your mind that the banks are in the wrong!? You still think the banks are right? How?

    There WERE rules in place. This is the point that’s now been PROVEN in court. Do the FSA principles mean nothing?

    Rule one: ''A firm must conduct its business with integrity''
    Rule six: ''A firm must pay due regard to the interest of its customers and treat them fairly.''

    Have you not heard of GISC that the banks happily signed up to, to flog insurance? Were they just meaningless statements, that could be used as part of the sales pitch. e.g. ''please trust us, we’re members of GISC''

    What’s fair about systematically ripping off your customers?

    I mean what evidence is there that the banks broke the rules AT THE TIME. Only a high Court Decision from a Judge with years of experience and legal knowledge, a Super complaint from the Citizens Advice Bureau (back from 2005 based on information from before!), 1.5 million complaints, 24 FSA fines, three FSA thematic reviews, a reports from the Office of Fair Trading, detailed reports from the Competition Commission, the ban of an entire category of the insurance and a forthcoming point of sale ban of the whole product. As well as more than 100’000 complaints going to the Financial Ombudsman Service 75% going in favour of the consumer.

    I mean apart from that the banks are right and the jury is still out, I suppose? And what have the Romans done for us?

    I think what you're saying is that FSA, should have stopped the bad practice at the time rather than leaving it for years and doing nothing. Then going back and punishing the banks now.

    Firstly, if the banks weren’t regulated properly at the time, why should the consumer lose out now? The lack of action from the regulators have no bearing on individual complaints (ever heard of self-regulation?).

    It’s also an outrageous argument. The banks lobbied for light touch regulation (they still do now!) and the less the regulators did the better (in their eyes).

    Now they're turning round and effectively saying - why did you not regulate us at the time! It’s your fault we mis-sold polices because you let us.

    Unbelievable. :rotfl:
  • src007 wrote: »
    Rule one: ''A firm must conduct its business with integrity''
    Rule six: ''A firm must pay due regard to the interest of its customers and treat them fairly.''

    Strictly speaking, they are principles, not rules but yes if they are not complied with then a consumer might be entitled to redress.
    src007 wrote: »
    Have you not heard of GISC that the banks happily signed up to, to flog insurance? Were they just meaningless statements, that could be used as part of the sales pitch. e.g. ''please trust us, we’re members of GISC''

    Again, the FSA has no jurisdiction over the GISC Code - although FOS does in most cases and, if it has been breached, can award redress.

    There are, though, two issues.

    The first is whether they should be writing to all past customers and inviting them to make a complaint, rather than actually responding to them as and when they come in.

    The second is the one about sales standards. It is difficult to defend adding a massive premium to the loan and charging interest on it - particularly if the cover ran out long before the loan did (although it is not impossible). On the other hand, Pay As You Go cover for somebody who was eligible is likely to be and certainly if a product was paid for online.

    But you seem to have jumped to the conclusion that I have taken the banks' side. I am simply putting the argument.


    In the end, whether the complaint is upheld or not should depend on whether the complainant was able to make an informed decision or not at the time.

    If they were aware of the true cost (including any interest that would be charged if it was added to the loan) and the benefits (including any restrictions on how long the cover lasted and any medical conditions that would not be covered or if they were not eligible for unemployment cover) and that the cover was entirely optional, and chose to take it then they knew what they were getting for their money and should not be redressed.

    If they were misled then they should be.
  • Culex wrote: »
    The rule under which the FSA "unfairly" insists that suckers are given a fair chance?

    Depends what you mean by "suckers".

    If you mean they were not given the information required to make an informed decision in a way that was clear, fair and not misleading, then they are not the suckers but whoever sold it was for failing to ensure it was done that way.

    I would include documentation that was difficult for most people to understand in that. However, if they were to provide a clear accurate and fair description of what a product did whose fault is it if the consumer then doesn't bother to read it?
  • edited 26 April 2011 at 6:37PM
    src007src007 Forumite
    420 Posts
    edited 26 April 2011 at 6:37PM
    You did write the 'banks do have a point' so I'm not sure that I'm jumping to any conclusions.

    It's widely reported that that the court case was some kind of ''consumer victory.''

    This is because at the moment consumers are point blank denied their statutory right to complain because there's 100'000's of complaints and only a handful of Ombudsmen to force an outcome.

    However,
    The FSA are not on the consumers side.
    The FOS are not on the consumers side (they would be breaking the law if they were).

    Where's the consumer victory?

    Both instiutions are neutral. What this is about is:
    In the end, whether the complaint is upheld or not should depend on whether the complainant was able to make an informed decision or not at the time.

    All this court case means for the consumer is that they can have an fair hearing at the FOS, as the government intended. E.g. a level playing field.

    Sure, principles aren't stictly speaking rules (although whats the difference in practice?) and are harder to follow (as they're more general).

    I understand that it can seem an impossible situation for the banks because they can pay millions for advice from the best Lawyers in the world and however much they pay, it's an impossible task for their brains to understand the meaning of the words 'integrity' or 'fairness'. :rotfl:
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