The FCA is investigating one firm over “serious problems” in the way it dealt with payment protection insurance misselling complaints and says it is considering whether several other firms should face further action.
The regulator has carried out a review into how 18 small and medium-sized firms are handling PPI complaints, covering smaller high street banks, building societies and credit card and personal loan companies.
It found “serious problems” with complaints handling in 12 out of the 18 firms reviewed.
The FCA asked each firm to provide a sample of 50 PPI complaints, made up of 40 rejected complaints and 10 upheld.
Complaint cases were judged on whether complaint handlers were assessing the merits of individual complaints in line with FCA rules and guidance, whether offers of redress were fair, and whether complaint handlers explained their decisions clearly to consumers.
In 12 of the firms reviewed, accounting for 6 per cent of all PPI complaints, the FCA disagreed with six out of 10 rejected cases and had concerns with the redress offers in almost half of the upheld cases.
To date, firms have paid out almost £12bn over missold PPI.
FCA director of supervision Clive Adamson says: “PPI has developed into the biggest issue of financial misselling in recent years, and has significantly damaged public trust in financial institutions. Ensuring that firms put things right by handling PPI complaints fairly is vital to bringing closure to the issue and rebuilding public confidence, and is a priority for the FCA.”
Highclere Financial Services partner Alan Lakey says: “I am dumbstruck that firms are still getting it wrong on handling PPI complaints. It is not as if there been a lack of guidance on how firms should be assessing complaints.”