Director at new FCA regulatory body outlines tough approach
by Luke Whitmore, 29th June 2011
In the wake of the PPI mis-selling scandal, the new financial
services watchdog, the Financial Conduct Authority (FCA), has
announced that they will be on the lookout for future
money-spinners from the banks.
The director of enforcement at the freshly-launched FCA,
Margaret Cole, has stated that the banks may attempt other
underhanded ways of making a profit and that regulators will need
to act more swiftly than they did regarding the systemic
mis-selling of PPI, which cost millions of customers billions of
pounds as they paid out premiums for pricey and worthless loan
insurance.
"Institutions are looking at ways of refinancing their income
streams and we need to be very alive to them," stated Cole, setting
out the goals of the FCA. "There is a risk that other products that
aren't suitable will replace PPI, which provided them with a very
good income stream."
PPI, or Payment Protection Insurance, is a form of insurance
which was frequently offered alongside loan products. Intended as a
way for customers to protect themselves against defaulting on the
loan if they should suffer an unexpected loss of income, many of
those who paid for PPI policies after being encouraged to do so by
their lender subsequently found that they were not able to make a
claim. This is because many of them were not eligible for PPI in
the first place, and the policies were mis-sold to them by the
lending institution as a means of making a profit.
Cole has said that in future, banks "have got to think about
their business models and about the risks of aggressive sales of
products," and that the FCA will be ensuring that this ethos is
adhered to, with the watchdog to take a more active role in
preventing situations like the mis-sold PPI scandal from arising
again.
If you have suffered financially as a result of the mis-sold PPI
scandal, we can help you claim PPI compensation.
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