Banks to drop PPI appeal
by Katy Murcutt - Paralegal
09 May 2011, filed under Consumer
The BBA (British Bankers association) had announced yesterday that they will no longer be pursuing its legal action which would have opposed new rules for the way it handled its PPI (payment protection insurance) complaints.
This current news comes after announcements by Barclays and the Lloyds Banking Group that they had decided to no longer give their support for any upcoming appeal against the decision in the High Court.
The British Bankers’ Association was initially acting on behalf of a large number of top high street banks which had applied for a judicial review of the approach which was taken by the FSA (Financial Services authority) and the FOS (Financial Ombudsman Service) to PPI complaints for mis-selling. These complaints had claimed that the new regulations applied stricter selling standards than those which had been in place at the time the sales had actually been made.
However, on the 20th of April this year, the High Court had made their decision to dismiss the application and gave the British bankers’ Association until tomorrow to firmly lodge their appeal. And this morning the BDA had confirmed that the matter will not be going any further, by posting it on their website.
Payment Protection Insurance (PPI) covers consumers against their repayments on their credit cards and loans if the consumer in question is unable to make a payment because of sickness, death or even an accident.
This decision means that thousands of PPI complaints which have previously been placed on hold since all the legal action began can now proceed forward. The FOS has stated that since the BDA had started its application in the October 2010, the ombudsman has been flooded with around 5000 new complaints every week.
And it is now thought that thousands of consumers can still benefit from the new regime even if they haven’t yet put in a complaint about their PPI policy. Under the new guidance, if a firm finds sufficient evidence of a constant mis-selling, it could offer redress to consumers who have been mis-sold their payment protection insurance but who have not yet proceeded with their complaint.
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