Obviously not, which is why the FSA deemed 2007 as the year for treating customers fairly or TCF as it is affectionately known. The FSA has a huge task -mounds of red tape and the enormous number of regulated firms, means that its TCF agenda is hard to police.
TCF has been running for three years and the FSA has already unearthed six ways in which customers are harshly treated, including impenetrable jargon, promotions that arouse unrealistic expectations, complex products and unfair barriers to switching. But you still wonder whether consumers are getting a fairer deal today.
One area where the FSA has thrown its weight around is mortgage exit fees and, after an investigation, it “apparently” came down hard on lenders that sneakily raise fees long after the mortgage has been taken out. It also made it clear that these exit fees should reflect the actual cost to the lender and to be fair since the ruling several lenders scrapped the fees for new borrowers.
But it has now emerged that over 50 lenders are still charging exit fees of more than £100 despite last year’s pressure from the regulator, which has got the backs up of some intermediaries. Several big lenders, including HBOS, Cheltenham & Gloucester and RBS, scrapped their exit fees last year after the probe but many lenders are still charging big amounts. Mortgage Express and Alliance & Leicester charge the highest fees at £250 and £295 respectively. The true cost of an exit fee is estimated at just £35.
What’s more, there is more than one way to skin a cat and it was never going to be long before lenders changed tack to avoid losing out.
Several lenders have simply given the fee a new name while others have introduced a mortgage application charge, which is paid in addition to any product fee and is not refundable.
The regulator’s intention that all customers be treated fairly is laudable enough but questions have been raised over whether its consumer-friendly charter can be policed effectively.
In the past, the FSA has dismissed the notion that companies are flagrantly ignoring its agenda and feels that progress is being made but a year ago Clive Briault, head of retail markets, admitted that the good intentions of management were struggling to make “it down to the consumer coalface” and that it was fair to assume that it was “taking a long time for firms to get the message”.
He added: “Have we got to a situation where every single firm is following all of our requirements on the selling of PPI? Regrettably, we have not. Is it better than it was two years ago? We think it is but it takes time to implement changes.”
That the FSA has a huge task is indisputable. For one thing, it has confirmed that it is not expecting providers to check on advisers selling their products but it does want providers and advisers to work more closely together for the benefit of the consumer. Again, laudable, but I have my doubts that too much will change – providers are in business to make money, after all.
The fines have certainly been coming thick and fast. In the past month alone, a stockbroker was fined £250,000 for high-pressure sales tactics, while HSBC’s HFC division was handed a £1m fine for payment protection insurance failings. It is unlikely to be the last fine in this contentious area, with firms still going through the enforcement process. Meanwhile, the Financial Ombudsman is receiving more complaints on PPI than ever before.
The FSA’s initiative offers a degree of comfort to consumers that they did not have before, but the grievances will not stop. Providers will try to flout the guidelines, make mistakes and try to wriggle out of them while the ombudsman will still be inundated with complaints.
Paul Farrow is personal finance editor at the Telegraph Media GroupMoney Marketing
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