The investigation found that there were 25 High Court cases in 2009, compared to only one case in the previous five years. Claims were brought against valuers for many reasons, including:

• negligently overvaluing commercial premises that dropped in value because tenants became insolvent during the recession;
• negligently overvaluing residential property development sites which dropped in value because of falling house prices and a big increase in similar new build properties built during the housing boom;
• negligently underestimating the cost of putting a development project on hold; and
• negligently valuing a property that was subject to a fraud.

Banks and building societies have launched legal action against surveyors, claiming that they had overvalued properties that they had repossessed and been forced to sell for much lower sums. However, surveyors have hit back at these claims, stating that many of these properties had securitised loans against them and that lenders, rather than valuers, were to blame for the upward pressure on prices.

The Competition Commission initially announced its plans in October 2009, after its investigation found that banks and building societies faced “little or no” competition when selling PPI to their credit customers. However, the proposed ban was challenged by Barclays, supported by Lloyds Banking Group and Shop Direct Group Financial Services, who argued that a point-of-sale ban was unjustified and that it would inconvenience customers. 

Consequently, the Competition Appeal Tribunal ruled that further investigation was needed, but, after further analysis, the Competition Commission concluded that a ban would bring greater competition, more choice and lower prices – benefits that would outweigh any inconveniences for customers.

The PSD is part of an EU initiative to harmonise the way payments are made and received within the EU and it will apply to everyday payments such as cash deposits and withdrawals, credit transfers, direct debits, credit and debit card payments, money remittance payments and other digital payment services.

It aims to promote competition and will create three types of payment service provider structures: (1) banks and building societies, (2) electronic-money institutions, and (3) ‘payment institutions’ which can offer payment services in competition with other providers. It will also provide conduct rules for payment service providers and customers, which set out their rights and obligations, and providers will have to give customers specified transactional information.

The FSA, who will be responsible for supervising firms who have operations that fall within the scope of the PSD, has published a new webpage which provides information on the obligations and notification requirements applying to payment institutions under the Payment Services Regulations 2009.