Regulator tells banks to stop putting off PPI cases
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The FSA says banks must continue to assess every complaint relating to payment protection insurance rather than deferring cases due to the judicial review.
Mr Justice Ouseley ruled at the Royal Courts of Justice in London last week in favour of the FSA and the Financial Ombudsman Service over PPI measures in a judicial review brought by the British Bankers’ Association in October.
Following a hearing in January, the High Court ruled the FSA was right to impose a package of redress measures on firms who have sold PPI, which could cost firms between £3bn and £5bn.
The FSA handbook requires firms handling complaints to issue a written response within eight weeks of the complaint being made with either a final decision or a written explanation of why a final decision cannot be provided. In the case of the latter, firms have to make customers aware of their right to take their complaint to the Financial Ombudsman Service.
An FSA spokesman says: “We are aware that firms are not dealing with complaints. What firms need to do is look at every single complaint and then decide whether they can deal with it.
“If they decide they cannot take it forward for whatever reason, including the ongoing review, we understand that but where they can deal with complaints without reference to what is being challenged in court, then we expect firms to take the complaint forward and deal with it.”
The FSA has also said that failure to deal with PPI complaints could lead to enforcement action being taken.
The BBA says: “Any complaints that are directly affected by the judicial review and therefore can not be decided will continue to be placed on hold until the next steps have been decided.”
It adds that all PPI complaints not affected by the review would continue to be processed as normal.
The BBA has 21 days to decide whether to launch an appeal against the judgment.
When the BBA launched the judicial review in October, Lloyds Banking Group said it would put its PPI complaint-handling on hold.
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