The result of the PPI court case

If you have been following the mis-sold PPI court case with interest, then you may be interested to know the verdict which was eventually reached. The case, which related to the systemic mis-selling of PPI (Payment Protection Insurance) by the banks, revolved around the Financial Services Authority (FSA) introducing new rules which required lenders to reassess previous sales of such loan insurance, in essence asking them to retroactively apply new regulations to old PPI policies.

The banks took umbrage at this, and started court action against the FSA. While this was underway, they suspended any repayment on PPI, despite protestations from consumer groups who stated that this course of action was illegal. After several months of deliberation, the verdict was finally announced that the banks had lost.

It was decided that the FSA’s new rules were fair, the banks were responsible for the mis-selling of PPI and should be required to reassess the policies they had already sold, and customers were entitled to refunds on loan insurance premiums they had already paid – plus interest, as established in previous financial claim cases.

As was expected, the British Bankers’ Association (BBA), who had been representing the banks, declared soon afterwards their intention to appeal against this decision. However, not long afterwards, the banks’ motivation to challenge the ruling apparently collapsed, and they began to set aside various funds based on how much PPI compensation they expected to have to pay out to customers.

As a result, the BBA gave up on the appeal, and it was decided that the banks were now to abide by the FSA’s new rules and the court decision on PPI, meaning that millions of customers would now be entitled to claim back billions of pounds of recompense for the loan insurance which they had been mis-sold previously.