JEAIL > Volume 12(2); 2019 > Notes & Comments
Research Paper
Published online: November 30, 2019

Regulator-led Resolution in Mass Finance Mis-selling: Implication of the UK PPI Scandal

Young Yoon Park
Parnas Tower, 38th Floor, 521 Teheran-ro, Gangnam-gu, Seoul 06164 Korea.
Corresponding Author:

ⓒ Copyright YIJUN Institute of International Law
This is an Open Access article distributed under the terms of the Creative Commons Attribution Non-Commercial License ( which permits unrestricted non-commercial use, distribution, and reproduction in any medium, provided the original work is properly cited.

The resolution process of PPI scandal was led and driven by the UK’s FCA- financial regulator based on powers stipulated in Financial Services and Markets Act 2000. FCA made rules requiring financial institutions concerned to assess mis-selling claims of PPI holders and pay redress to them if mis-selling was found. The opt-out class action, in contrast, is not likely to handle finance mis-selling collectively because commonality requirement is not easily satisfied. The PPI resolution process overcame this problem by assigning the investigation and assessment of individual aspects of the disputes to the financial institutions concerned. This approach is equitable in that financial institutions which are liable to the scandal bears the time and pecuniary cost instead of relying on public resources of courts as in the litigation. The regulator-led resolution can be helpful in designing collective resolution system of finance mis-selling which is characterized as mass victims with small damages.

Keywords : Payment Protection Insurance, Mis-selling, Suitability, Consumer Redress Scheme, Class Action, Mass Torts

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