The banking industry has given up their legal fight over the mis-selling of payment protection insurance (PPI) and will not be appealing the Judicial Review they lost on 20th April 2011. The British Bankers Association (BBA) has stated they do not intend to appeal after losing the court challenge, meaning that the new rules on mis-selling will be implemented accordingly.

This decision is welcomed by the Financial Ombudsman Service whereby last month the High Court ruled that the banks had to comply with the new rules of the Financial Services Authority (FSA), which require them to go back over all their past sales to review where mis-selling has occurred.

Leading high street bank, Barclays, has stated it has set aside £1bn in order to distribute compensation whilst HSBC has put aside £269m. This may now start to see customers trust and confidence in the banks restored in the hope that Banks will start to compensate the estimated several million consumers, fairly and promptly.

PPI policies are supposed to protect and cover consumer credit/loan repayments should they fall ill or lose their job – however these policies have been mis-sold for a number of years meaning that people were paying over the odds for a service they either could not claim on, or were not even entitled to in the first place- due to being self-employed or a student, for example.

In some cases we are learning that borrowers were not even aware that had taken out the PPI policy or they were told they could only receive the loan/credit agreement on the condition that they purchase PPI alongside it.

If you think you may be eligible to claim back your PPI www.realclaims.co.uk will do all the hard work for you whilst you reclaim the money you are legally entitled to.

The British Bankers Association launched a judicial review over the new rules on how complaints about payment protection insurance (PPI) should be handled by a bank in January and the review has been on going until today when the judge ruled in favour of the consumer.

Unfortunately it is not all great news as the BBA can still appeal against the high court ruling which will mean many more months in court. The appeal must be made by the 10th of May.

However we are hopeful that banks will learn from this loss and start processing claims again.

UPDATE

“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.

The lack of cooperation from some financial businesses has made it difficult to progress PPI cases over this period. 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.”

FOS statement

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After several years of investigation by the Office of Fair Trading, Competition Commission and the FSA, the regulator announced in August a firm crackdown on the way banks have been dealing with complaints about mis-sold PPI policies.

It stipulated, among other things, that banks and other lenders will have to review old complaints about the mis-selling of PPI and has announced new rules that will come into effect on December 1st.

The new rules could mean that more than 2.5 million people being refunded as much as £2.7bn in total.

The British Bankers Association have disagreed with this ruling saying it could open a can of worms because the new rules could set a precedent, and then be applied to the sale of other products.

The FSA is contesting the British Bankers Association for judicial review.

In the last 5 years there have been more than a million complains and the FSA has claimed that loan firms were turning down half of them with some turning down nearly all claims.

About 30% of the rejections were turned to the Financial Ombudsman Service (FOS) for help, where about 80% of the complaints were then upheld.

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We have seen so many companies in recent months spring up in the business of PPI promising to reclaim miss sold payment protection insurance policies. 

Having been involved in this industry for many years we always find it of great interest to understand the problems associated with over selling these services, giving customers unrealistic and impossible expectations.

Many clients tell us that some companies will, without a contract or policy number be able to miraculously claim back the miss sold payment protection premium for the customer for only a small fee.  It always amazes me that clients believe this to be true and have parted with hard earned cash in the belief that this could happen only to find out months down the line that no advances have been made.

If you are sure you have payment protection insurance or a PPP policy, loan protect or any other acronym meaning the same thing you can request your agreement yourself.   In most cases if you ring the lender you can usually get the information providing you jump through all the security hoops, such as Date of birth etc.  The lender will almost certainly provide a copy of the agreement providing you give a valid reason, ie accountant requires the information, your applying for working families tax etc.

If you have your agreement number but have lost your loan contract you can request under Section 77/78 of the Consumer Credit Act 1974 which provides you with access rights to a copy of the  agreement and all other documents referred to within the agreement. 

It is the lenders duty to provide you with a copy of the agreement, as signed by both parties and other documents.  If this is the case contact realclaims today and request a copy of the letter to send on to your lender we will only be too happy to assist.

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185,000 previously rejected complaints against mis-sold payment protection insurance (PPI) are to be re-opened under new guidance from the City Watchdog.

The FSA will ask sellers of PPI to write to all holders of policies bought since 2007 in order to give them a chance to complain and potentially have their money refunded.

The reason behind this is to try and alleviate some of the pressure the Financial Ombudsman Service has faced recently with the unprecedented level of complaints they have received from the public after loan firms have rejected their complaints.

Firms representing more than 40% of face-to-face sales in the Single Premium Unsecured Personal Loan PPI market have agreed to review these sales and redress those consumers identified as mis-sold.

Single premium PPI has been the most notorious sort of PPI and the sale of it was banned earlier this year.

The FSA has currently taken action against 22 firms over poor PPI sales practices with Alliance & Leicester receiving the largest fine of £7m in October 2008 for serious failings in its telephone PPI sales.

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