New FSA, OFT guidance Aims to Prevent Future Mis-Sold PPI Scandal
The FSA and OFT are said to be drawing up guidance on how to avoid banks mistreating their customers, as they did with the mis-sold PPI scandal
Guidance is being drawn up by both the Financial Services Authority (FSA) and the Office of Fair Trading (OFT) to make sure they do not see a repeat of the mis-sold payment protection insurance (PPI) scandal in the future.
Numerous banks were found to have sold as many as 16 million policies to customers taking out mortgages, loans and credit cards who did not need PPI, had not asked for it in the first place or were ineligible for it in any case.
As a result, billions of pounds have been set aside by financial institutions to pay back those they have cheated out of money.
Now the FSA and OFT have reacted to concerns that financial services firms will simply try and create new financial products that confuse customers into buying policies they do not need.
The two organisations have consulted and stated that they will use their powers to stop firms if they think they are doing this.
Margaret Cole, FSA managing director, said: "This is the first time that the FSA has issued guidance on the design of a specific product.
“The two organisations will continue to monitor developments in the market, and will take appropriate action under their respective powers where firms’ products or practices risk causing detriment to consumers.”
Commenting on the news, Simon Thompson, managing director at specialist mis-sold PPI claims firm Precision Claims, stated: “It’s positive to see that two very powerful bodies in the industry are teaming up to make sure customers are protected in the future.”
“Too many people have suffered as a result of banks’ continued dishonesty and we look forward to financial institutions concentrating more on helping their customers, rather than trying to exploit them,” he went on to say.
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Precision Claims specialises in mis-sold PPI compensation claims, as well as personal injury claims and care home claims. For more information about the law firm’s legal services, visit: http://www.precisionclaims.co.uk
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