Is Reclaiming PPI still possible?

The British Bankers' Association (BBA) has launched a judicial review over new rules on how complaints about payment protection insurance (PPI) should be handled.

PPI is supposed to cover the cost of repayments if a customer becomes ill or unemployed and cannot work. It has been criticised in recent years after a large number of mis-selling complaints surfaced. Many UK consumers have already put in complaints to claim back PPI from their lenders due to mis-selling.

The Financial Ombudsman (FOS) has received more than a million complaints from consumers looking at reclaiming PPI and more claims are still flooding in.

The judicial review is against City regulator the Financial Services Authority (FSA) and the Financial Ombudsman Service (FOS).

The BBA is unhappy that new rules introduced by the FSA governing the way PPI is sold will be used to assess complaints about policies that were taken out before the new regime came in.

It is also unhappy about the way the FOS is using the new rules when it assesses complaints that have been referred to it by consumers.

The FSA has not granted a waiver allowing banks to put them on hold until after the review, in the way that it did for unauthorised overdraft charges. Despite this, the banks involved in the action have said they will not handle complaints that would be affected by the review until after the outcome is known. Therefore claims can still be processed!

PPI complaints that would not be affected by the review are being handled as normal.

The new rules aim to ensure consumers are treated fairly, both when they buy PPI and when they complain about being mis-sold the cover.

Among other things, they require providers to talk potential customers through the key features of a policy, rather than just provide them with a document giving the information. They will also have to be able to show that it was made clear to the consumer that the cover was optional.

Banks claim it is unfair to apply the new standard retrospectively to policies sold before it came in. They claim that under the new regime a consumer will be able to state they were mis-sold a policy and attempt to claim back ppi if the bank cannot provide evidence that they were talked through its features, even though banks were not required to do this at the time the policy was sold.

Source: http://www.thisismoney.co.uk/credit-and-loans/ppi-mis-selling/article.html?in_article_id=521822&in_page_id=506