British banks will have to pay back millions of pounds after Britain's High Court rejected an appeal by the industry against mis-selling to their customers in a controversial insurance policy. Banks have been criticized for selling the so-called payment protection insurance (PPI by the acronym), which covers personal loans if the borrower become unemployed due to illness or discharge, at prices so excessive and often inappropriate.
Financial Services Authority meanwhile has changed the rules governing the selling of insurance and wants to apply retroactively, which would force banks to return these millionaires, according to British media.
The regulator estimates that these changes could cost the financial industry about 4,500 million pounds (5,100 million euros), but the British Banking Association, which represents the industry in this case, believes the impact could be much more high. Only
Lloyds Banking Group, which has about one third of that market, might have to pay £ 1,500 million (1,725 \u200b\u200bmillion euros), according to analysts quoted by the Financial Times today.
groups representing consumers have welcomed the verdict favorable to the customers of the High Court.
More than a million and half customers say they were victims of such abuse of the bank and ask to be compensated.
The ombudsman receives every week around 5,000 new claims for compensation for such policies, of which have sold over 16 million.
Many customers were sold the insurance without being observed and simply added to the total cost of credit while others such as students or self-employed, improperly signed.
average compensation have so far had to pay banks for this type of abuse has been 2,750 pounds (3,160 euros), but a customer came to be compensated with 44,000 pounds (50,600 euros). MarketWatch
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