FSA says winning battle over PPI was a major highlight of 2010 in its 2011 Annual Report released today
Winning the battle over mis-sold Payment Protection Insurance is picked out as one of the highlights in the last year for the Financial Sevices Authority in a statement from the Chairman accompanying the release of this years FSA Annual Report.
The FSA’s annual report, covering 2010/2011, says that securing greater redress for consumers remains one of its aims.
On the misselling of Payment protection insurance (PPI) the FSA Reports…
“Since we began regulating PPI in 2005 we have taken enforcement action against 24
firms for sales failings. We have completed three thematic reviews, issued warnings,
stopped the selling of single premium PPI with unsecured personal loans and visited
over 200 firms to improve the market.
In August 2010, we published a Policy Statement confirming our package of measures
to protect consumers in the PPI market.”
The package was designed to ensure customers are treated fairly when complaining
about PPI; it included:
• new Handbook guidance to ensure complaints are handled properly, and redressed
fairly where appropriate;
• an explanation of when and why firms should analyse their past complaints
to identify if there are serious flaws in sales practices that may have affected
complainants and even non-complainants.
• an open letter setting out common sales failings to help firms identify bad practice.
The measures came into force on 1 December 2010.
On Delivering consumer protection
“In October 2010, the British Bankers’ Association (BBA), supported by interested
party Nemo Personal Finance Ltd (Nemo), launched a judicial review of our PPI
complaint-handling measures, also challenging material published by the Financial
Ombudsman Service (the ombudsman service).
However, on 20 April 2011, the High Court dismissed this challenge to our PPI
measures. The challenge against the ombudsman service was also dismissed.
The BBA had argued that firms could not be made to pay redress in relation to
breaches of the Principles and that the Principles could have no effect where the
FSA had written detailed rules. The judgment fully supported the way we had
used the Principles in this case. The judgment also supported our decision to use a
complaints-led approach to tackling the problems in the PPI market rather than the
use of an industry-wide review of past business.
On 9 May 2011 the BBA and Nemo confirmed they did not intend to appeal the
judge’s decision. This brought to an end the legal proceedings. We believe this decision
will trigger a dramatic improvement in the way customers are treated when making
complaints about PPI.”
On Delivering consumer redress
In October 2010, as part of the Financial Services Act 2010, Section 404 of FSMA
was amended to give the FSA a new supervisory power to deliver prompt and effective
redress for consumers. The new section 404 power provides the FSA with authority to
make rules requiring firms to establish and operate consumer redress schemes, without
the approval of the Treasury.
The reports coincides with the news from Barclays Bank that they will honour all claims for PPI misselling made before 20th April this year, without challenge.
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- Payment Protection Insurance Claims and Premiums Rocket
- What a bunch of Bankers! UK Banks challenge PPI ruling
- FSA orders GBP 60 Million Mortgage Protection Insurance Repayments
- Loan Payment Protection Insurance Competition Commission report
- Payment Protection is the solution to National Debt management
- FSA says shop around for Loan Payment Protection Insurance
- FSA fines Alliance and Leicester £7m for misselling Loan Protection