UK banks face £4.5billion bill after judicial review
The swines that run the UK's banks won't be happy this morning after they collectively lost a judicial review which could see them hit with a £4.5 billion fine after claims that they mis-sold loan insurance.
Banks are now going to have to look back on past sales of Payment Protection Insurance (PPI), taking into consideration every policy, including those taken out by people who haven't complained.
The British Bankers' Association (BBA) are said to be "disappointed" by the ruling and has 21 days to appeal. There'll be a lot of teeth gnashing and clenching of fists going on, that's for sure.
Already, thousands have already received compensation on PPI policies, which were supposed to repay one's loans if income dropped thanks to illness or loss of employment. The banks challenged the Financial Services Authority (FSA) over guidelines published last year which said that banks needed to contact all past PPI customers and ask them to complain if they were under the impression that they'd been mis-sold of policy. However, High Court judge, Mr Justice Ouseley, rejected the challenge.
Natalie Ceeney, the chief financial ombudsman, said: "This judgment is very clear-cut - and it confirms that the ombudsman's approach to PPI complaints is right. People have been waiting a long time while the banks' legal action has been ongoing. I would now like to see financial businesses showing real commitment to sorting out their customers' complaints efficiently and promptly."
Of course, there have been many PPI sales sold which were appropriate, however, largely, it has been suggested that our beloved banks have been mis-selling them and raking in millions of pounds from selling insurance that people just didn't need, couldn't claim on or, indeed, weren't even aware they had.
If the banks appeal is unsuccessful, customers will be repaid their PPI premiums plus interest. Thus far, there's been more than 200,000 cases referred to the ombudsman with around three in four complaints being upheld.