BBA Gives Up Legal Fight Against Mis Sold Payment Protection Insurance

May 9, 2011 - PRLog -- The British Bankers Association (BBA) has today given up its legal challenge against mis sold payment protection insurance by announcing that it will not appeal against the High Court ruling of 20 April 2011.

In a statement the BBA said: "In the interest of providing certainty for their customers, the banks and the British Bankers' Association have decided that they do not intend to appeal."

This follows on from LloydsTSB’s decision on 5 May 2011 to withdraw its support for the legal challenge.

In response to LloydsTSB’s announcement last week that the bank has set aside £3.2 billion pounds against potential claims other UK banks have now announced that they are following suit with their own provisions.

Barclays are now providing £1 billion pounds to meet the compensation, HSBC £269 million pounds and RBS have also confirmed that it will not contest the ruling.

PPI (Payment Protection Insurance) has been in the news on and off recently as UK banks fought to challenger ule changes implemented by FSA (Financial Services Authority) and FOS (Financial Ombudsman Service).

This challenge culminated in a High Court hearing on 20 April 2011 where the High Court rejected the BBA’s arguments.

The BBA were given until 10 May 2011 to make an appeal.

Payment Protection Insurance is a product designed to cover loan and other credit payments if someone loses their job, falls ill or has an accident.

An estimated 16 million policies have been sold during the last 6 years in the UK and a large proportion of these are now thought to have been mis sold.

The policies were sometimes sold to self-employed persons who would be ineligible to make a claim, often misrepresented as being necessary for the issue of a loan and also to customers who did not know that they were taking the policy out.

The mis sold payment protection insurance scandal has led to numerous complaints being made to and upheld by the Ombudsman and this led to The Financial Ombudsman  complaining  to the regulator that it thinks lenders are “deliberately trying to obstruct the Ombudsman process“.

There has also been an increase in the number of claims handling firms who attempt to reclaim PPI back on behalf of consumers.  Should you be considering using a claims handling firm it is important that you ensure that they are regulated correctly.  A firm of Solicitors will be regulated by the Law Society through the Solicitors Regulatory Authority and a claims firm will be regulated by the Ministry of Justice.

The latest mis sold payment protection insurance news comes as another blow to the banking sector which is still trying to trade its way out of the recession.

For more information on PPI compensation claims and help on making your claim please visit http://www.ppiclaims-info.com

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