CPMA gathers momentum and banks pay £40 million to customers

Happy New Year !

The blog has been a little quiet over the last few weeks but quite a lot has happened in the PPI world over Xmas.

There has been a lot of views on the implementation of the new body (the Consumer Protection and Markets Authority CPMA). Essentially, it will replace the Financial Services Authority (FSA) as the organisation which will regulate financial businesses in the UK. Its been described as an organisation which will endeavour to be a 'Consumer Champion' and fight for the rights of the public. Whether the CPMA will provide that extra layer of protection will have to be seen to be believed. It is more than likely the organisation will be made up of the same individuals, at the same offices as the FSA - so we will have to see whether it will effect real change in the industry.

Another story mentioned over Christmas was that the banks have so far paid back £40 million to Mortgage PPI customers who were sold a policy, but the monthly premiums were unfairly increased during the recession to take into account the increased risk to the insurers. This meant customers who were told they would pay a set amount per month for the policy found themselves paying much more for the same insurance. The banks had until 30th June 2010 to make the refunds - but the FSA expected £60 million to be refunded, so this is quite substantially less than the amount expected.

The BBC also reported that banks were deliberately stalling claims and taking over the stipulated 8 weeks to investigate the cases. This means the Ombudsman's caseload increases significantly and takes even longer for the matters to settle. The reasoning behind this appears to be that some banks are refusing to analyse whether a case is subject to the terms of the Judicial Review and as such be suitable for a settlement.

A little more consideration on the particulars of the Judicial Review were assessed recently with the FSA and FOS both providing their responses to the BBA's application. The responses are detailed and look positive from a claimant perspective. The hearing is due to take place at the end of January 2011 with the decision probably due around spring time. I hope the High Court will dismiss the application without the further hearing, but we will have to see how this unfolds in due course.

If you think you have been mis-sold a Payment Protection Insurance policy, do not hesitate to contact us via http://www.ppireturn.co.uk/