Severla banks seek judicial review
High street banks will launch a high court challenge today against new rules applied retrospectively to sales of payment protection insurance (PPI), according to the Guardian.
The banks are seeking a judicial review of guidance issued by the Financial Services Authority (FSA) in December designed to stop mis-selling of the insurance.
The rules include the requirement that providers talk potential customers through the key features of a policy rather than assuming they will read relevant documentation. They also have to provide evidence they have made it clear to consumers that the purchase of PPI is optional if it is taken out alongside credit.
But the British Bankers' Association said that by applying the rules retrospectively, the FSA was "effectively creating a precedent which permits it to apply new rules to previous sales – even where those sales were regulated by other FSA rules".
Several banks, with the exception of Santander, have put some complaints on hold until the outcome of the judicial review is known.
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