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Banks face billions of pounds in costs for PPI compensation
Payment Protection Insurance has been sold to millions of borrowers alongside loans, even when they were not in a situation to ever be able to claim on it. The responsibility lies with banks to ensure that compensation is given to wronged consumers.
Industry regulators pressurised to compensate clients who had policies mis-sold to them, and the outcome of the judicial review confirmed that the responsibility fell to the banks to ensure that compensation was given to wronged consumers. The result is that the banks are now facing substantial costs in order to meet their legal responsibilities.
The Financial Services Authority has granted banks an extension on the usual deadline of dealing with complaints - any complaints regarding mis-sold PPI received before the 20th of April must receive replies before the end of August - but they must still sort through these, which has led to a need for additional employees to assist in the process.
Written by Douglas Wemyss Solicitors at http://www.d-
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