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One firm in FCA enforcement over PPI complaints handling

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 medium and small 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: “We expect firms to deliver fair outcomes to PPI complainants. In our review, we found some firms are doing this while it is clear others still have some way to go.

“I am encouraged the firms in scope of our review have taken immediate steps to put in place the necessary remedial measures and I expect them to ensure they have robust processes in place to work through the remaining complaints, so that eligible complainants can be paid out as quickly as possible.”


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

  1. Why, one may ask, has no director of a bank that has conspicuously failed to handle PPI complaints been banned from the industry and fined several years’ bonuses? No doubt many firms deserve punishment for their conduct over PPI, but how can this be justified while the directors of clearing banks are allowed to enrich themselves?

  2. And this review was based upon a sample of 50 cases that the lenders chose themselves ! Imagine the results if they had not been allowed to send their “better cases”.

    The only way that complaint handling will improve will be if the FCA levies meaningful sanctions on those organisations involved. I expect the subsequent review of how larger firms are handling these cases will be even more damning.

    Time and time again complaints data and thematic review shows what the rest of us already know, (with a few exceptions) the larger the firm the worse the practices, yet regulation continues to focus disproportionately on smaller firms.

  3. Joseph

    That is indeed the nub of the problem. In these cases fines are paid by the company – which is a long way divorced from the individuals perpetrating the mis-advice. The money in the end is met by the shareholders and the Revenue, as whatever the fine it impinges on the bottom line leaving less for dividends. As profits are lower – so is the Corporation Tax.

    Enforcement action in these cases is merely an inconvenience for firms and might even be welcomed by employees as it may lead to some overtime for the extra work in providing the bureaucrats with information.

    Compare this to a fine in a small firm or sole trader. The fine comes directly out of the pockets of the directors/principals. The extra work impinges on the ability to do ‘the day job’ thereby yet further compounding the cost (and the misery). Furthermore it is a direct slur on the people (as opposed to the firm). And poor Natalie Ceeney has a problem understanding why small advisers get so het up when facing claims.

  4. Well said, Joseph Egerton (above). But why not go further? – why has no director of a bank that has mis-sold PPI deliberately, in industrial quantities, to customers who neither wanted nor needed it, been charged with any criminal offence or indeed jailed?
    For that matter, how is it that directors of HSBC, the bank that was fined £millions by the SEC and FSA for money laundering for Mexican drug cartels, Russia and Iran have escaped criminal charges? If it were a small firm in this position we all know that the directors would be held responsible and sanctioned – if they knew about it they are responsible, if they didn’t, they are incompetent

  5. Like many on here I have been calling for a number of years for senior managers and directors of institutions that have been rightly fined for miss-selling scandals to not only be banned from financial services but also to face conviction on fraud charges.
    Surely we should stop calling it miss-selling and start calling it fraud after all any of these directors knew exactly what they were doing when they were building sales structures to increase sales and thus increase their bonuses. Until we hold individuals directly accountable for decisions within major organisations like banks and building societies and insurance companies we will be doomed to repeat the same mistakes again and again.

    These directors are very quick to pick up multimillion pound bonuses but run and hide an even get their friends in the regulator to overlook their misdemeanours.

    I for one would like to know why the FCA and its previous regulator the FSA has not sought prosecution of any top director or senior manager for what is effectively a £12 billion fraud!

    Surely question should be asked in the House of Commons and a file past to the serious fraud squad. Just because you wear a tie and shirt does not mean they are not criminals.

  6. So let me get this right – CMC’s have been saying for years that banks have been dealing with PPI complaints incorrectly and have been making inappropriate offers for years (CMC manager remember RBS making £750 offers on ALL complaints? apart from of course the ones where they owed more?) and the BSA the FSA, the FOS and (sorry for swearing here) Martin Lewis saying that people can do this on their own and there is no need to use a third party? So how many of these people that did do it on their own have been screwed by the banks???

    I am not in anyway saying that someone should be going onto Google and picking the first CMC they see or in no way suggesting that anyone who responded to a text message has been proved right, but SOME CMC’s are doing the best for their customers and ARE getting them much more than their friendly and helpful bank are offering and are doing more than sending a generic letter.

    We were at one the first meetings with the FOS, about PPI, in 2007 when the FOS confidentally stated that the number of cases about PPI would be dropping within 12 months and the whole issue would be finished and dealt with within 2 years. This was met with enormous laughs and the FOS were told in no uncertain terms that the issue of PPI was going to be MASSIVE and they completely disregarded any and all comments. We were equally saying to the FOS at this point that the banks should be penalised considerably more than they were being because if you dont penalise them they have no deterent and will continue to reject and pay pitiful amounts where they can get away with it.

    And we are now at the point when everyone is accepting that PPI is an issue and that maybe, just maybe, the banks acted incorrectly in the first place and have continued to act fraudulently in the way in which they responded to such complaints. I am very sorry but CMC’s have been saying this for years and no one listened. Maybe, just maybe if a few more people took this seriously and took some action years ago a) this wouldn’t be such a problem and b) you wouldn’t have had so many ‘dodgy’ CMC’s as there would have been no business for them to conduct.

    The FOS were well aware of this problem years ago and the FSA should have equally been aware of this years ago, but no one did a thing about it.

    And yet everyone is still saying trust your bank and the FOS to deal with the issue properly and you will get the correct redress you are due – again CMC Manager – ever heard the FOS say ‘we aren’t a checking service and we dont check the amount of redress offered’? Well who does and who knows what the customer is due?

    By the way I think we can count the number of cases we have dealt with against PROPER IFA’s (not car salesman or loan brokers) on the fingers of one hand. Proper IFA’s dont sell tat. If you need good advice go to someone who knows – an IFA, and if you need assistance with a problem against your bank go to someone who can help – a good CMC.

  7. I do indeed recall the days when RBS offered £750 on all cases (unless their calculations showed that redress was less tan this). This was around the same time as RBS were ignoring the very substantial difference in redress for re-financed loans by calculating all loans on a stand alone basis and not repaying any credit card interest on uphold cases. This is something the FSA / FOS chose not to pursue at that time

    I also very familiar with the FOS line that they are not a checking service and spend much of my time explaining their own approach to redress to them. With a few exceptions most of the adjudicators at FOS are more concerned with there being an outcome than whether that outcome is fair on either party.

    I would certainly concur that the number of claims we have dealt with against IFA’s is in single figures and we actually suggest to any clients who ask us for financial advice that they should speak to an IFA

    I would certainly encourage any organisation at the wrong end of fraudulent or vexatious claims to report these to the MOJ as it is only by doing so that we can drive up standards

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