The FSA says firms have a duty to assess every complaint relating to payment protection insurance before deferring cases in light of today’s judicial review ruling.
Mr Justice Ouseley ruled at the Royal Courts of Justice in London this morning in favour of the FSA and the Financial Ombudsman Service in a judicial review over PPI measures brought by the British Bankers’ Association in October.
Following the hearing in January, the High Court ruled today that the FSA was right to impose a package of redress measures on firms who have sold PPI, which could cost firms up to £3.2bn.
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.”
In response to the ruling earlier, the FSA said that failure to deal with complaints could lead to enforcement.
In its response the BBA said: “We are disappointed with today’s judgement and now need to consider the details of it very carefully as well as next steps, including whether it would be appropriate to apply for permission to appeal.
“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.”
The BBA has 21 days to decide whether it wants to appeal the judgement or not.