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ombudsman news

issue 91

December 2010 / January 2011

ombudsman news "Q&A" page

featuring questions that businesses and advice workers have raised recently with the ombudsman's technical advice desk - our free, expert service for professional complaints-handlers.

What's the latest on the judicial review on payment protection insurance (PPI) complaints - being brought by the British Bankers Association (BBA) against the FSA and the ombudsman- And how is it affecting PPI complaints with the ombudsman-

On 8 October 2010 - on behalf of a number of high-street banks - the British Bankers Association (BBA) filed papers in the High Court requesting a judicial review of the Financial Services Authority (FSA) and the Financial Ombudsman Service.

This is a legal challenge relating to:

  • the FSA's new payment protection insurance (PPI) complaints-handling measures that came into force on 1 December 2010 and
  • information on our website about the approach we take to consumers' complaints that they have been sold PPI policies inappropriately.

The judicial review is scheduled to take place in the High Court in London during the week beginning Monday 24 January 2011.

At the time the BBA launched its legal challenge, we confirmed that we would continue to deal with PPI complaints, while awaiting the outcome of the court case. This has meant that we have continued to receive and process new PPI cases - now being referred to us at a rate of up to 2,500 each week.

This number has been increasing. Many businesses are continuing to handle complaints as normal but some have decided that they will not respond substantively to many PPI complaints until the final legal outcome is known.

The consumers in these cases can still bring their complaints to us - but only once they have first given the business eight weeks (the time the business has to sort out complaints under the FSA's 'DISP' complaints rules).

The increase in PPI cases referred to us by consumers, where the businesses involved have not set out their conclusions on the complaints by the end of that eight-week period, means the rate at which we can settle these cases is now slowing down.

Where businesses do not set out clear views on cases, it will be difficult for our adjudicators to resolve cases informally. Inevitably this can only result in further delays and additional costs.

We regret any reduction in service levels for customers with PPI complaints. Consumers and businesses with complaints about all other financial products and services will remain unaffected by this.

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ombudsman news gives general information on the position at the date of publication. It is not a definitive statement of the law, our approach or our procedure.

The illustrative case studies are based broadly on real-life cases, but are not precedents. Individual cases are decided on their own facts.