A landmark judgment has been delivered today in the long-running battle between the British Bankers Association and the Financial Services Authority over the mis-selling of Payment Protection Insurance.
Victory for the FSA means that as many as three million people may be due compensation after having been mis-sold PPI in the past. It is believed that the ruling could lead to Banks paying out up to £2.7billion in compensation.
PPI is meant to repay loans or credit cards, when people become unemployed or fall ill. Whilst it is a useful insurance when sold correctly, in many cases it was added to loans without any discussion, with payment often being insisted on up-front. And whilst members of the public paid for insurance they did not want or need, Banks generated huge profits, with PPI often costing thousands of pounds.
In January 2011 the Banks took the FSA to Court, as they argued that current rules about how PPI should be sold could not be applied retrospectively and that people who were sold PPI prior to 2005 should not now be able to claim compensation. In his ruling on 20thApril 2011, Mr Justice Ousely found against the Banks on all counts.
Joanne Carroll, Manager of the PPI Department at Davis Blank Furniss commented ‘This ruling means that as many as three million people may be due compensation after having been mis-sold PPI in the past and it could now cost the banks billions in compensation. We all know our financial institutions are under pressure – especially after the last few turbulent years – but that shouldn’t mean their balance sheets take precedence over what’s fair and just for the general public. Today’s judgement reflects that and is a complete victory for the FSA and the public alike. It should also act as a warning for the future. I would urge anyone who has had a loan or credit card in the past to check whether or not it included PPI, as now is the time to pursue a complaint if you feel it was mis-sold.’
The British Bankers Association has until 10 May 2011 to appeal the High Court ruling.
For more information, or if you wish to make a PPI mis-selling complaint, please contact:
Joanne Carroll (Joanne.Carroll@dbf-law.co.uk)