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Lloyds pulls out from PPI legal action

Lloyds Banking Group has decided to withdraw from the judicial review brought by the British Bankers’ Association against the FSA and the Financial Ombudsman Service over payment protection insurance redress measures.

It follows Lloyds’ announcement this morning that it has set aside £3.2bn in redress, including administration expenses, in anticipation of compensation costs relating to the PPI products the bank has sold.

The BBA launched its judicial review in October, which disputed the package of PPI redress measures outlined by the FSA in August and guidance on PPI published on the FOS’ website.

The case was heard in January, and in April the High Court ruled in favour of the FSA and the FOS.

The BBA has until May 10 to lodge an appeal against the High Court’s decision.

A Lloyds spokesman says: “We will no longer be participating in the BBA’s judicial review. We believe this draws a line under the issue. We have always said that we wanted to provide certainty for our customers. Drawing a line under this issue does exactly that and is also in the interests of the long-term stability of our business.”

Which? executive director Richard Lloyd says:”This is great news for the millions of Lloyds customers who have been mis-sold PPI. It’s refreshing to see a bank break ranks from its peers and do the right thing by its customers.

“The rest of the UK’s banks must now follow suit and draw a line under the great PPI mis-selling scandal by withdrawing their legal challenge of the FSA and pro-actively reimbursing the millions of customers who were mis-sold PPI.”

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. michaerl brayne 5th May 2011 at 11:33 am

    I first discovered this PII scam back in 1988 and got refunds for my clients, still nice to know the FSA finally got there.

  2. anthony brennan 6th May 2011 at 12:22 am

    This is a smart move by the new chief executive. It ensures his future performance is not marred by old claims. However 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.

    http://www.blog.bank-charges-recovery.co.uk/

  3. It was futile, how much did they spend on this action? The only winners are the lawyers once again, they should replace their in house legal team for exposing them to this embarrassing situation.

  4. Exasperated Me 6th May 2011 at 9:58 am

    “Dear Banks, drop this JR immediately”

    “Dear HMG, OK”

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