Banks clear mis-sold PPI backlog up to April

Many customers expecting compensation

by Russell Shackleford, 5th September 2011

The major high street banks have cleared the backlog of mis-sold PPI complaints which accumulated during the judicial review back in April.

The banks were given until midnight on the 31^st of August to contact customers over Payment Protection Insurance that may have been mis-sold to them, and though some of the banks are reported to have missed the deadline, they have now all reported that their accumulation of backdated claims has now been cleared for those which were received prior to April.

The judicial review that banks brought against the FSA was intended to prevent new rules on PPI mis-selling from being applied retroactively, which meant that the banks put their complaints procedures on hold in the hope of being able to avoid paying out to wronged customers.

After losing the case, they were therefore instructed that they would be required to reopen these claims and ensure that any customers who were mis-sold PPI were compensated appropriately.

The FSA's rules on responding to complaints were relaxed due to the massive number of complaints received, giving the banks until the end of August to sort through the claims rather than limiting them to the usual eight week time limit.

Now that this deadline has passed, banks are to be granted sixteen weeks to respond to any complaints received after April 20^th but before the beginning of September, and any cases brought between September and         December will have to be handled before twelve weeks have elapsed. In this way, the banks are hoped to be eased back into normal operations with regard to dealing with customer complaints.

Once banks have confirmed with customers that their PPI was mis-sold to them, they are expected to make payment to them within a month. Many borrowers will therefore be receiving refunds in coming weeks.