PPI Judicial Review
Banks in the UK have lost a judicial review that could have a major impact on whether more compensation has to be paid to people who have been mis-sold loan insurance. The PPI Judicial Review states that banks will now also have to look at past sales of Payment Protection Insurance (PPI), even if consumers have not complained, to see if it was mis-sold.
Thousands of people have already received compensation because they were mis-sold PPI policies, which are supposed to repay people’s loans if their income drops because they fall ill or lose their jobs.
Natalie Ceeney, the chief financial ombudsman, said:
“This judgment is very clear-cut – and it confirms that the ombudsman’s approach to PPI complaints is right.
People have been waiting a long time while the banks’ legal action has been on-going. I would now like to see financial businesses showing real commitment to sorting out their customers’ complaints efficiently and promptly.”
During the hearings, the court was told that to carry out the new guidelines could cost the banks and credit card companies as much as £4.5bn.
The banks have challenged the Financial Services Authority (FSA) over guidelines it published last year which said banks should contact all past PPI customers and invite them to complain if they thought they had been mis-sold PPI.
The High Court judgement will affect millions of bank customers. The banks have argued that the FSA was in effect applying new rules to previous sales – which had been regulated by other FSA rules.
“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.”
But the FSA said
“Our primary aim has always been to get proper redress, once and for all, for those with genuine complaints
We believe this decision signals the end of years of poor complaint handling and will trigger a dramatic improvement in the way customers are treated when complaining.”
PPI Judicial Review – What It Means For You
If you have a loan, a credit card, or a mortgage, you could be a victim of a company who is mis selling payment protection insurance without you even knowing it.
Mis Sold PPI is when the buyer has no idea they are signed up for the additional payment to their monthly premiums or believe that what they signed up is different from the coverage they are receiving. No matter the circumstances , charging a customer for something they are not aware of is unlawful, and you may be entitled to a full reimbursement for the insurance you have been unknowingly paying in addition to the payments required for your loan. So far a number of vert well-known lenders have been guilty of mis selling payment protection insurance, including MBNA , Alliance & Leicester, Capital One, HSBC, and Egg.