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High Court decision - 'significant' impact on dealers' PPI business

A High Court ruling yesterday on payment protection insurance is set to have a “significant” impact on dealers.

The decision to dismiss the British Bankers Association’s legal challenge against PPI redress measures was welcomed by the FSA, but while this ruling may still be challenged for motor retailers the implication of the judgement as it stands is the substantial increase in the number of customers to who the repayment of PPI premiums is to be made.

It has been quoted that the impact of this judgement is estimated likely to cost more than £2 billion.

The FSA has already introduced new sales and complaints handling procedures which retailers should be following, irrelevant of the final court decision.

What the BBA was challenging was the FSA’s policy statement that effectively applies these new standards to past sales.

Stephanie Murdoch, managing director of Alliance Consultancy, said: “The court decision as it stands impacts every retailer.

"By December 1, all retailers were expected to have undertaken a review of all PPI complaints received to identify their root cause.

“If this review identified failings of the retailer they are required, if the judgement still stands, to revisit every past PPI sale, not just those sales where a complaint has been received to assess whether the handling of the customer meets the new rule requirements.

"Customer redress is expected if shortfalls are identified."

In response to the High Court, decision the FSA said: "Our primary aim has always been to get proper redress, once and for all, for those with genuine complaints.

"We believe this decision signals the end of years of poor complaint handling and will trigger a dramatic improvement in the way customers are treated when complaining."

Guidance and further information is available from the AM Compliance Programme. For details click here.

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