Judicial Review Ruling on Payment protection insurance
In April, 2011, the British court issued a positive decision for consumers in a judicial review of new Payment protection insurance, or PPI, regulations that the British Banking Association (BBA) had requested the courts undertake. Increasing complaints by consumer groups regarding these policies and the complaint process, prompted the Financial Services Authority (FSA) to issue stricter rules governing the plans last year. Banks were instructed to review past sales and proactively notify customers of their right to file complaints if they believed they were sold the insurance improperly. The legality of this “retrospective” change was questioned, but the court ruled in the FSA’s favour. Now customers may be entitled to reimbursement of their premiums, plus interest, and similar repayments may be made to those who paid their entire premium up front. The FSA’s ability to hold banks accountable for violating their own principles and their customers’ trust has been strengthened a great deal by this decision.
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