High Court rules against the banking industry
April 20, 2011
For a number of years the topic of Payment Protection Insurance, or PPI, has been a hugely controversial one, following claims that millions of people had been mis-sold the cover over the years. Consumer groups have been campaigning to ensure that those that were mis-sold the cover are compensated but the banking industry has said that it would be too costly to do this.
However, this week the High Court ruled against the banking industry, which means that the industry could be set to face costs in excess of £4.5 billion because of the number of claims that they are likely to be faced with. Millions have already sent in claims previously, which were dealt with by the Financial Ombudsman Service and were usually ruled in favour of the consumer.
After this week’s decision many more people will be likely to send in a claim over mis-sold cover because of their increased chances of making a successful claim. Consumer campaign groups have been delighted with the decision that was reached today, as they say that millions of people were sold the cover when they could not even claim on it, others were sold the cover without even knowing about it, and some were pressured into taking out the cover even though they didn’t want to. The banking industry, on the other hand, has been very disappointed with the ruling.
A spokesperson from the BBA said: ‘We are disappointed with today’s judgment 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 cannot be decided will continue to be placed on hold until the next steps have been decided.’
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