An appeal by the British Bankers’ Association (BBA) to secure
more favourable treatment for banks in the ongoing epidemic of PPI
complaints was thrown out yesterday by a high court judge.
As a result, banks will have to apply FSA guidance on PPI
mis-selling retrospectively, and contact customers with the product
to offer them a chance to complain if they feel their PPI was
mis-sold.
Go deeper with GlobalData
Since 2005, when the FSA became responsible for regulation of
PPI, some 1.5 million complaints have been made against financial
services businesses which sold the product – and the number is
continuously rising.
The Financial Ombudsman Service (FOS) received 15 percent more
complaints against financial institutions in the second half of
2010 than in the preceding six months, with PPI complaints making
up 50 percent of complaints in Q4.
This proportion was up from 45 percent in Q3 and 34 percent in
Q2, the first quarter in which the FOS began publishing complaint
figures by product association.
Motor finance companies have generated far fewer PPI complaints
than mortgage providers and other types of lenders, but should
still expect to see a hike in complaints as a result of yesterday’s
ruling.
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By GlobalData
