Insurers and the FSA have been citiscised for their part in the mis-selling of PPI.
While attending the Association of British Insurers’ last week in London, Financial Ombudsman (FOS) Chief, Natalie Ceeney commented that the insurance sector has a collective responsibility to act when it is made aware of bad practice. She also went on to say “I have had a lot of insurers say to me privately that they knew their product was being sold badly and with hindsight mabye they should have intervened earlier. I believe they should have.”
A sentiment I completely agree with if you provide a service then surely you would want that service to be sold correctly and appropriately. It is clear that in this situation sales were of a much higher importance than service to the insurance companies a situation that tends to arise all too often for banks and insurers. If the banks and insurers concentrated even half as much on customer service as they do on selling new products to customers then possibly scandals such as PPI mis-selling could be avoided. However I’m not in the slightest bit suprised by the failure of Banks and insurance companies to act responsibly after all there is money to be made. The big suprise in all of this is the failure of the FSA, the financial regulator, to intervene earlier.
Highclere Financial Services partner Alan Lakey had this comment on the matter ”There is an element of truth to what Natalie Ceeney has said but it is the FSA that has an obligation to protect consumers and it was made aware about the problems with PPI a long time ago, so the regulator should have stepped in as well as insurers.” Last year the FSA recieved the most complaints in their 10 year history and PPI complaints formed a high percentage of all complaints recieved. The Bank with the highest number of complaints between July and December 2010 was Barclays Bank with 276,315 complaints. The FSA has said that its successor the FCA will learn from the mistakes of the past and will move quicker to identify risks and prevent mass mis-selling. They have also said that they will adopt a much stronger aproach, something they failed to do in regards to the mis-selling of PPI.
In order to improve the service supplied to customers by banks and insurance companies it is imperative that the financial sector is regulated in a more succesfull manner and that problems within the sector are addressed as soon as possible. It is however just as improtant that we, the customers, make a complaint if we are treated unfairly by the banks or insurance companies. It is said that customers are more likely to get divorced than they are to change banks something which needs to change. I think its about time we draw a line and refuse to let theses companies get away with providing poor service while emptying our wallets. It is our civic duty to claim back any PPI that has been mis-sold to us so the banks may think twice before defrauding their customers again.
