Banks Lose PPI Judicial Review

Britain's banks have lost their court case against the Financial Services Authority over how complaints about payment protection insurance (PPI) should be handled. This now paves the way for compensation payouts to millions of customers who have been mis-sold a PPI product.

Today's Judicial Review determined that the banks must continue to accept compensation claims from customers who were sold the policy before new rules were introduced at the end of last year.

The FSA said in a statement: '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.'

The BBA, representing the banks, are considering their position and made this statement: 'We are disappointed with today’s judgment and now need to consider the details of it very carefully as well as next steps, including whether it would be appropriate to apply for permission to appeal,'

Many of the big high street banks had refused to handle PPI complaints until the High Court made its decision - despite an order from the FSA not to delay dealing with complaints.