The Financial Services Consumer Panel has condemned the actions of many high street banks for failing to resolve consumer complaints over payment protection insurance (PPI) claims.
PPI Compensation Claims
A hearing to determine whether changes in complaints handling demanded by the FSA and Financial Ombudsman Service are wrong in law begins in the High Court today.
The Consumer Panel is concerned that financial institutions are using litigation as an excuse to apply a blanket suspension on processing PPI cases leaving many consumers having to wait even longer for compensation.
The British Bankers’ Association (BBA) is asking the court to determine whether the regulators can impose new requirements on firms which go beyond what was stated in the FSA’s own rulebook – specifically those on handling complaints about payment protection insurance (PPI) sales.
Adam Phillips, Chair of the Financial Services Consumer Panel, said: ‘The Financial Ombudsman has identified tens of thousands of cases of mis-selling. This litigation should not be an excuse for banks to apply a blanket ban on processing claims.
‘Banks must continue to deal with PPI cases on their merits and not try to pass the buck to the Financial Ombudsman. This results in further delay with the cost of redress falling on the industry as a whole. We look forward to the FSA taking tough enforcement action against institutions that apply blanket bans.
‘Banks should hold up their hands and admit their mistakes. It is time for the industry to stop hiding behind expensive lawyers, leaving consumers to wait years for the redress they deserve.’
Which? chief executive, Peter Vicary-smith, said: ‘This Judicial Review is further proof that the banks are shamelessly trying to duck out of giving millions of consumers the redress they’re entitled to. The banks are still obliged to consider all PPI complaints, so there is no excuse for them to stall. Which? wants the banks to stick to the rules and carry on processing their customers’ legitimate complaints.’
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