FSA warns firms may try to shirk PPI liabilities by phoenixing

The FSA has warned that firms reassessing past payment protection insurance complaints may look to shed liabilities by phoenixing.

Speaking at the Mortgage Business Expo in London yesterday, director of small firms and contact centre Lesley Titcomb told intermediaries the FSA was on the look out for this kind of activity.

She said: “Our recent consultation paper on payment protection insurance brought the prospect of firms having to reassess past PPI complaints they have rejected and some think this could mean more firms try and become phoenix firms to leave these behind.

“I should warn them that we are alive to that threat.”

She added: “We are watching certain firms very closely and we are determined to remain one step ahead of potential phoenix firms and take strong action against firms and individuals that try this.”

In her speech Titcomb also warned brokers about referring clients to claims chasers, cautioning that without the appropriate permissions, such deals could put them in breach of data protection rules.

Titcomb also pointed out that mortgage market review proposals to require income verification on all mortgages are not intended to exclude all self-employed borrowers from the mortgage market.

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. Give you an example of this.

    Company: Click Finance Limited (big broker for Firstplus)

    Customers can no longer claim mis-sold as click has dissolved.

    Company: Click Financial Limited (new company) run by same directors of Click Finance Limited.

    Frankly this sort of approach is shocking in this day and age, and more suprising the FSA has been informed and they have done nothing about it.

    So I suspect this is all hot gas.

  2. It is rather a shame, yet so wearingly familiar, that the FSA wasn’t “alive” to the risks presented by its total lack of regulation of PPI selling before all the damage was done. Yet another case of the FSA being asleep at the wheel (or, as the TSC put it just a few years back when grilling John Tiner “positively comatose”).

    Who can blame business owners for phoenixing to get out from under the FSA’s never ending succession of hindsight (oops, sorry, “thematic”) reviews of past business?

    When is the FSA going to stop shirking responsibility its own manifest failings?

  3. Just like the Staasi

  4. When it was pointed out to the FSA that the endowment shortfalls were in part caused by LAUTRO imposed charges the FSA reaction was to deny responsibility – saying that it was nothing to do with them.

    However, the Regulator of the day, was “Phoenixed” into the FSA. Look FSA up at companies house online and see previous names.

  5. Like Picture Finance and a raft of other large companies?? Too late to get the real guilty ones as usual. Well done FSA

  6. Example No.1: The FSA Phoenixed from LAUTRO/SIB to the FSA and so avoided responsibility from the endowment shortfalls cause by the LAUTRO insistence of LAUTRO projection rates. This was admitted when Janet Walford challenged the FSA on this issue.

    Example No.2: Well know exponent of fees and RDR Towry Law Phoenixed their misselling liabilities onto the FSCS for all those nasty commission hungry IFA’s to pay for! That’s why those nasty commission hungry IFAs don’t like the pontifications of the holier than thou Towry Law!

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