The High Court ruled today against the banks in a challenge brought by the banks over new regulations to control the selling of payment protection insurance (PPI) to borrowers
The new regulations not only apply to new policies sold after the beginning of December, but also to complaints relating to cover before the new regime was brought in and, therefore, the High Court ruling means that PPI claims can be pursued retrospectively quashing the banks challenge to this ruling.
The ruling opens the way for an estimated three million people to receive up to £4.5 billion in compensation for being mis-sold PPI.
The FSA announced a firm crackdown on the way banks have been dealing with complaints about mis-sold payment protection insurance policies stipulating, amongst other things, that banks and lenders will have to review old complaints about the mis-selling of PPI.
To this end, it announced new rules that were due to come into force on 1st December, which could result in more than 2.5 million people being refunded as much as £2.7bn in total. The banks are currently challenging the new ruling claiming that the new rules, which could be applied retrospectively were “illegal”, and as such require judicial review.
The FSA strongly believes that the package of new complaint-handling measures is a sensible and fair solution for consumers and industry alike. The good news is that the FSA has decided to allow consumers to continue complaining and so consumers should complain now whilst they have the chance as if the banks are to unjustly win this review then the chances of getting compensation will be limited.