Banks scrap PPI mis-selling fight

The banking industry today abandoned its legal fight over the mis-selling of payment protection insurance, paving the way for thousands of customers who were mis-sold the policies to receive compensation.

The British Bankers’ Association (BBA) said it will not appeal after it lost its High Court challenge against new FSA rules on mis-selling PPI being applied retrospectively.

The move comes after Britain’s biggest retail bank, Lloyds Banking Group, last week said it was pulling out of any further legal action and setting aside £3.2bn to compensate customers.

Barclays also announced today that it will pull out of the legal fight and said it will begin to process complaints from customers which were previously on hold.