With Lloyds and Barclays both announcing they will pull out of legal action in recent days, the BBA had no choice but to confirm it will not be appealing the recent rejection of its judicial review.
According to their own estimates, this means the banks could be set to pay out up to £3.2bn in compensation for mis-selling PPI products.
But how did the industry react?
Natalie Ceeney, chief ombudsman, Financial Ombudsman Service
“It’s very good news that the banks will not be appealing the High Court’s clear-cut judgment, which endorsed the ombudsman’s and the FSA’s approach to PPI complaints. We are pleased that banks will now be dealing with their customers’ complaints.
“Consumers should come to us at the ombudsman if they’re unsure about what to do next.
“Meanwhile we will be working with the banks, over the coming weeks, to ensure that consumers’ complaints are dealt with fairly and promptly.”
Adam Scorer, head of external affairs, Consumer Focus
“Finally the banks have agreed to face the music on the issue of PPI. The entire episode is an embarrassment for our High Street banks – it is now time to wipe the slate clean, pay up and look to learn lessons for the future.
“PPI highlights that people find it difficult to understand everyday financial products. Banks need to offer more consumer friendly accounts and services which do what they say on the tin.
“Refunding billions of pounds to millions of people will be a mammoth undertaking and to get it wrong would add insult to injury. We are calling on the banks to put aside the resources that are going to be needed to ensure people get their money back quickly and efficiently.”
Martin Lewis, MoneySavingExpert.com
“This is a wonderful day for consumers. For once, the banks have done the right thing and backed down. As much as £9bn that was wrongly taken from consumers could now be paid back – an economic boost as money from banks’ coffers will move into the pockets of real people.
“Everyone who has got or had a loan or credit card in the last six years should check their policy now to see if they have this insurance. If you do, and were told it was compulsory, if you were given employment cover but you were self-employed, or if you were not asked about a pre-existing condition, you are likely to be a mis-selling victim.
“Reclaiming should now be easier. Hopefully, people will stop unnecessarily using claims handling firms that take 25% of their cash and go through the simple process of complaining to the bank, then going to the free Ombudsman if that doesn’t work.”
What the banks said:
Bob Diamond, chief executive, Barclays
“We have taken this decision because it is in the best interests of our customers, as well as for Barclays and its shareholders; creating certainty, particularly regarding past issues, is of benefit to all parties.
“We don’t always get things right for our customers; when we get them wrong, we apologise and put them right. That’s our commitment to our customers, and it applies to the way in which we will deal with PPI complaints.”
HSBC
“There are many factors which affect the estimated liability, including the nature and volume of customer complaints, the extent to which HSBC may be required to take action, and the facts and circumstances of each individual customer’s case.
“Accordingly there is currently a high degree of uncertainty around the ultimate costs of dealing with the matter.”
Lloyds
“There are still a number of uncertainties as to the eventual costs… all of which will significantly affect complaints volumes, uphold rates and redress costs.”
And on Twitter…
WhichAction: Great news – the bankers have agreed NOT to appeal the #PPI ruling, so if you’ve been mis-sold PPI, they’ll pay up.
timroyds: PPI selling – like a TV retailer selling a TV to someone when they know it’s impossible for their house to receive a TV signal…
MartinSLewis: The banks have dropped the case over PPI. My guess £9bn going back to consumers. GREAT DAY
ChukaUmunna: I am pleased the BBA, following Lloyds’ lead, will not be appealing the PPI case – they should have said so earlier
stevebizcoach: Why does it take the law and courts to stop banks doing what is clearly wrong, i.e. PPI scam? Why just not do it because it is, WRONG?
