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FOS says FSA used wrong tactics over PPI redress

Natalie Ceeney

The Financial Ombudsman Service says the FSA was wrong not to set up a collective redress scheme to deal with PPI misselling.

Speaking to the Parliamentary Commission on Banking Standards last week, FOS chief executive Natalie Ceeney said the FSA’s failure to set up a collective redress scheme was an “opportunity missed” with millions still caught up in the “complaints machinery”.

She said: “In our view collective action would have been the right answer on PPI. We now have tens of millions of customers who are in the complaints machinery. It is too late to turn the clock back and proactively compensate customers. It is a bit of an opportunity missed.

“If you know something has gone wrong en masse it feels absolutely right for the regulator to ask for mass compensation.”

An FSA spokesman highlights its consultation on PPI redress from March 2010 where the regulator said it thought “carefully” about a collective scheme but was concerned its powers were “unclear” as the relevant Financial Services Bill was still passing through Parliament.

Jacksons Wealth Management managing director Pete Matthew says: “It would have been a great idea as it would have put these claims chasers out of work. Those who deserve PPI redress would have got more money but instead claims firms are making a killing.”

London & Country head of communications David Hollingworth says: “An industry-wide scheme would have resulted in a less drawn-out affair and may have wiped out a lot of the claims management activity around PPI.”

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Comments

There are 13 comments at the moment, we would love to hear your opinion too.

  1. Compliance Bloke 8th February 2013 at 8:46 am

    FSA getting their tactics and decisions wrong?

    Surely such a state of affairs could never exist.

  2. Would that be the FSA lead by Hector who is now employed by one of the biggest PPI mis-sellers, and who has been given a Knighthood?

  3. They’re breaking ranks.

    Even the FSA’s friends now think they are crap.

  4. And how much money have the CMC’s taken out of the financial services industry as a result of the FSA’s misgivings and in the meantime leaving people who were mis-sold PPI out of pocket by a substantial margin as a result of the 30%-40% taken by the CMC’s

  5. And could it possibly be a case of wrong tactics regarding Key Data and Arch Cru?
    When it comes to tactics they are a bit like Glenn Miller before he got on the plane “Hey, where are the parachutes?”

  6. Neil I have earned a significant income from PPI misselling. More claimants complain to me about the poor mortgage advice they were given than the 30% I charge to reclaim their PPI. My conscience is clear.

  7. £7.4M Neil.
    Parasites do not usually recognise themselves as pests.

  8. @ Greg Walters 9.29am

    That’s my point Greg. If the FSA / FOS had got their act together in the first place and clients re-imbursed direct from the PPI providers then the clients would have been better off by not having to pay your “significant income”.

    I don’t have a problem with people making a living but given the fact complaints come in from CMC’ s stating amongst other things “it is clear you sold this policy for commission” I think that is a bit rich given the CMC’s make a vast amount more than any commission made by the broker who sold the “ASU” and not the alleged “PPI” we are accused of selling

  9. I can feel and Earldom coming on for Hector.

  10. If the FSA hadn’t failed to do its job properly and had tackled the issue of PPI mis-selling at a much earlier stage, much of the present costly mess would never have arisen.

  11. @ Anon 9.37am

    I would think that is £7.4bn not £7.4mn!!

  12. RegulatorSaurusRex 8th February 2013 at 1:44 pm

    Tell it like it is Nat

  13. Don’t you love it when one regulator criticises the other… what hope is there for the regulated?

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