By now the story of missold payment protection insurance isn’t exactly news, but it is certainly still newsworthy.
As PR offensives seek to reassure us the big financial institutions which floored the economy through obfuscation, complexity and greed are actually interested in doing consumers a favour, behind the scenes chicanery continues. They must think we’re mugs.
We will never get rid of the odd wide-boy looking for extra money for the wine bar, and so it may not be possible to eradicate misselling completely. But a new FCA thematic review on PPI redress says 85 per cent of complaints about single premium PPI products were upheld. That is deliberate and surely required approval at a high level.
And it wasn’t as if when all this emerged it was a complete surprise. The now defunct FSA took over regulating general insurance (including PPI) in 2005 fully aware of “potential issues”.
Thematic reviews, mystery shops and a fistful of fines and pronouncements from the regulator about “mainly disappointing” selling practices were largely ignored. Single premium PPI product sales only stopped in 2009 when the regulator “secured an agreement” from industry they would pack it in.
Since 2011, firms have paid out £16bn in compensation in the biggest consumer redress programme in UK financial services history. Given the scandal PPI has become you would have thought those guilty of taking their customers for a ride would be busting a gut to show they have changed. But, it looks like some at least have not changed at all.
Today’s thematic review says while some large firms have bucked their ideas up, other have failed to assure the regulator “of the overall fairness and consistency” of their PPI complaint handling.
As a result of its findings, the FCA has asked firms to review 2.5 million PPI complaints which may have been unfairly rejected or where consumers may have been paid too little in redress.
Turning to medium firms, the FCA says some have failed to demonstrate “their senior managements’ understanding of the issues or commitment to correcting them”.
Like I say, these firms must think we are mugs. But then again with so few people switching accounts or turning away from the banks that did much of the misselling, perhaps we are.
Steve Tolley is reporter at Money Marketing