View more on these topics

Lloyds ignores FSA calls on PPI

Lloyds Banking Group has stopped processing complaints related to mis-sold payment protection insurance despite warnings from the FSA not to do so.

The decision comes after the banking sector launched a judicial review against the FSA’s plans to introduce tougher regulation against PPI complaints.

The FSA is contesting the British Bankers’ Association’s  review and called on banks continue handling PPI claims as the review was being undertaken.

However, Lloyds confirmed yesterday that it was to change its policy, a move which is expected to be followed by other lenders according to the Financial Times.

“Complaints which are affected by the review are only being processed up to a point,” said a spokesperson. “We are seeking clarity from the FSA and the Financial Ombudsman Service on the judicial review, and until this is received complaints may be delayed slightly.

Lloyds did not say how many complaints had been put on hold. Lloyds no longer sells PPI but has attracted the highest number of PPI complaints to the Financial Ombudsman Service.

The bank was the subject of nearly 8,500 new general insurance disputes lodged with the ombudsman in first half of 2010, the majority PPI related.

Since the FSA took on regulation of PPI in 2005, it has taken enforcement action against 24 firms, largely for mis-selling.

In the past five years more than 1m complaints have been made to firms over PPI. In 2009/2010 alone, customers referred 49,196 complaints to the ombudsman.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 7 comments at the moment, we would love to hear your opinion too.

  1. its what we have always said, the banks are in control, NOT the FSA!

    Will the FSA now start enforcement action?

  2. Now let’s see – the banks sell PPI according to ICOB rules. The FSA then changes the rules and renames it ICOBS. It then decides that it will apply the current rules retrospectively, and then make the banks (who made sales compliant with ICOB) refund PPI customers with our taxpayers money – and you want to slam the BBA for challenging it? If the banks continue to pay out now the judicial review has been announced, they could prejudice their case by setting precedent. Expect the other banks to follow suit very soon.

  3. If it was a small IFA firm, the FSA would suspend them straight away, but because it is a bank, the FSA are powerless to do anything. As Nick says, the Banks are in control, not the FSA!

  4. I bet if a small ifa said “go away” to the FSA the stasi police would be on to them with all sorts of action.

  5. Barclays as well now, is this the beginning of the end?

  6. Much as I dislike the banks and PPI in particular I do not see why the FSA should be allowed to apply rules retrospectively.

    Everything should be put on hold until after the judicial review.

  7. Amazing. Lloyds, a virtually state owned bank, paid for by the taxpayer can give the ombudsman, set up to protect those taxpayers, a two fingered salute. Something is very wrong with this picture. I seem to vaguely remember FSA comments about ‘ethical principles’ in RO1. Time for the government to show its teeth if it has any left ?

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com