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Compliance consultant criticises systems for PPI

Barclays have been accused by compliance consultant Adam Samuel of sending out misleading information on payment protection insurance after applying for a credit card with the bank.

Samuel claims Barclays’ systems are issuing personalised recommendations on PPI to applicants who do not want to take out the product and says the notices do not reflect their circumstances or information disclosed to staff.

Samuel says he refused to discuss taking out PPI when applying for a Barclaycard at one of the bank’s branches. But he says he was given a statement of demands and needs, seen by Money Marketing, that he says makes claims he does not agree with about his financial situation and the conversation that took place over PPI.

Samuel says: “It suggests in a number of places that I have applied for insurance and that I have rejected advice and that I need insurance. None of these statements is correct nor reflect the conversation that I actually had.”

He believes that the bank could be breaching FSA principle 7 and Icob 2.2.2, which state that companies must communicate information in a way that is clear, fair and not misleading.

Samuel adds that he does not consider the bank’s systems are compliant with regulatory requirements.

He says: “When, at the request of a customer, no discussion occurs about payment protection insurance but the firm spews out a letter from the computer with a string of inaccurate statements, this suggests that the bank’s systems and controls are not appropriate to its business.

“It also suggests that the firm has not taken reasonable care to establish and maintain effective systems and controls for compliance with applicable requirements and standards under the regulatory system.”

A Barclays spokesman was unable to comment on Samuel’s case specifically but says: “In general, when we sell payment protection insurance with a Barclaycard, we always point out that the cover is optional and provide the customer with relevant policy details and exclusions.”

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