Barclays withdraws from PPI legal action
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Barclays has become the second bank to withdraw its support for the judicial review brought by the British Bankers’ Association against the FSA and the FOS over payment protection insurance complaint measures.
The bank has also announced a £1bn provision to cover the potential cost of PPI-related compensation and associated administration costs.
In an announcement this morning Barclays said it has decided not to participate in any BBA appeal against the decision by the High Court in April backing the FSA and the FOS over the PPI redress measures set out by the regulator last August.
Following the withdrawal of support from Barclays, and the news last week that Lloyds Banking Group was also pulling out from backing any appeal, the BBA has decided not to pursue an appeal against the High Court’s decision.
Barclays has also agreed with the FSA to process all PPI complaints that have been on hold during the judicial review process, which was launched by the BBA in October, as well as any new PPI complaints.
Barclays chief executive Bob Diamond (pictured) says: “We have taken this decision because it is in the best interests of our customers, as well as for Barclays and its shareholders; creating certainty, particularly regarding past issues, is of benefit to all parties.
“We do not always get things right for our customers; when we get them wrong, we apologise and put them right. That is our commitment to our customers, and it applies to the way in which we will deal with PPI complaints.”
Last week Lloyds Banking Group, which had the biggest share of the PPI market, announced a £3.2bn provision in relation to potential PPI compensation.
Royal Bank of Scotland also said last week that given the uncertainty surrounding the judicial review, it could not quantify its PPI liability, but warned that the liability “could prove to be material.”
FSA complaints figures for the second half of last year showed that Lloyds TSB received 84,775 general insurance and pure protection complaints, which include PPI complaints.
Over the same period Barclays received 59,003 GI and pure protection complaints and NatWest, part of RBS, received 26,967.
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Readers' comments (3)
Exasperated Me | 9 May 2011 9:54 am
“We do not always get things right for our customers; when we get them wrong, we apologise and put them right. That is our commitment to our customers, and it applies to the way in which we will deal with PPI complaints.”
But we fight tooth and nail, delay for years, embark upon fruitless legal action...
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anthony brennan | 9 May 2011 10:30 am
Although the bank has provided for the refund the money still needs to be claimed by the customer.
The money will not simply be repaid. The customer must first establish a basis of claim for the recovery of the money. This will still require some knowledge of contract law (ie basis of rescission) and of insurance law (Uberrima fides) to reclaim the money.
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Norm d'Plume | 9 May 2011 1:13 pm
Evidently Bob Diamond has started believing his bank's publicity.
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