This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.theguardian.com/money/2015/may/27/banks-face-bigger-ppi-mis-selling-bill-regulator-compensation-rules-fca-supreme-court

The article has changed 4 times. There is an RSS feed of changes available.

Version 0 Version 1
Banks face bigger PPI mis-selling bill as regulator considers compensation rules Banks face bigger PPI mis-selling bill as regulator considers compensation rules
(35 minutes later)
Banks could face a bigger bill for mis-selling payment protection insurance after the City regulator warned it was considering new rules on how customers should be compensated. Banks could face a bigger bill for mis-selling payment protection insurance after the City regulator said it was considering new rules on how customers should be compensated.
The Financial Conduct Authority said more customers could be eligible for compensation because of a supreme court decision. The court ruled in November that if a PPI seller failed to disclose to a customer that it had received a large commission from the product provider, the sale was unfair under the 1974 Consumer Credit Act. The Financial Conduct Authority statement means more customers could be eligible for compensation because of a supreme court decision. The court ruled in November that if a PPI seller failed to disclose to a customer that it had received a large commission from the product provider, the sale was unfair under the 1974 Consumer Credit Act.
The judgment on the case Plevin v Paragon Personal Finance means that more customers could qualify for compensation for Britain’s biggest mis-selling scandal. The FCA’s response to the ruling means that if a PPI policy was otherwise sound the seller could still have to repay the customer if it had received a big, undisclosed commission.The judgment on the case Plevin v Paragon Personal Finance means that more customers could qualify for compensation for Britain’s biggest mis-selling scandal. The FCA’s response to the ruling means that if a PPI policy was otherwise sound the seller could still have to repay the customer if it had received a big, undisclosed commission.
Banks and other companies have paid £18.8bn in compensation on more than 9m policies since January 2011, with the total cost expected to reach £24bn. As recently as January, the Financial Ombudsman Service was receiving 4,000 new cases a week.Banks and other companies have paid £18.8bn in compensation on more than 9m policies since January 2011, with the total cost expected to reach £24bn. As recently as January, the Financial Ombudsman Service was receiving 4,000 new cases a week.
The City regulator said: “The FCA is considering whether additional rules and/or guidance are required to deal with the impact of the Plevin decision on complaints about PPI. The FCA will be engaging with relevant stakeholders in the coming months in respect of this and it expects to announce its views on this, including next steps, at the same time as existing work.”The City regulator said: “The FCA is considering whether additional rules and/or guidance are required to deal with the impact of the Plevin decision on complaints about PPI. The FCA will be engaging with relevant stakeholders in the coming months in respect of this and it expects to announce its views on this, including next steps, at the same time as existing work.”
Banks and other financial services companies sold about 45m PPI policies between 1990 and 2010. The policies were sold alongside loans and other credit deals with the promise that payments would be covered if borrowers were unable to work. But in many cases, clauses in the policies meant customers could never make a claim and some were unaware that PPI had been added to their loan.Banks and other financial services companies sold about 45m PPI policies between 1990 and 2010. The policies were sold alongside loans and other credit deals with the promise that payments would be covered if borrowers were unable to work. But in many cases, clauses in the policies meant customers could never make a claim and some were unaware that PPI had been added to their loan.
In the Plevin judgement, the supreme court did not define what it meant by a large commission. Seventy-two percent of the £5,780 premium paid by the customer in the case was commission for the lender and the broker that sold the loan with the rest going to the PPI provider Norwich Union. In the Plevin judgment, the supreme court did not define what it meant by a large commission. 72% of the £5,780 premium paid by the customer in the case was commission for the lender and the broker that sold the loan, with the rest going to the PPI provider, Norwich Union.
The FCA said in January it was reviewing trends for PPI complaints and raised the prospect of setting a time limit on claims. The regulator said any changes in light of Plevin would be part of that review and that it expected to report over the next few months, when it will confirm whether compensation will be awarded for PPI sales that received undisclosed commissions.The FCA said in January it was reviewing trends for PPI complaints and raised the prospect of setting a time limit on claims. The regulator said any changes in light of Plevin would be part of that review and that it expected to report over the next few months, when it will confirm whether compensation will be awarded for PPI sales that received undisclosed commissions.