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.”