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Victims of PPI mis-selling receive £215m redress

by Daniel Grote on Aug 30, 2011 at 11:36

Victims of PPI mis-selling receive £215m redress

Consumers who were mis-sold payment protection insurance (PPI)  have so far received £215 million of redress, the Financial Services Authority (FSA) has revealed.

The FSA said the payments had been made in the first six months of the year, with £102 million paid out in May and June alone, following the High Court dismissal of banks' legal challenge to the FSA over PPI compensation.

It said that 16 firms, accounting for 92% of PPI complainants had made the payments.

Margaret Cole (pictured), interim managing director of the FSA's conduct business unit, said the regulator was releasing the figures to allow firms and consumers to keep track of progress made to resolve PPI mis-selling issues.

'The treatment of PPI complainants has left an indelible stain on the financial industry’s record,' she said. 'We remain 100% committed to ensuring that where consumers were mis-sold PPI they will receive the appropriate redress from firms, and we are monitoring firms’ progress to ensure this is done properly.  Where we find that this not to be the case, we are not afraid to take tough action.'

However, the payments represent only a fraction of the expected redress from banks and other firms which sold PPI, which is estimated to reach £10 billion. Lloyds has been landed the biggest PPI bill among UK banks. It estimated it would face a £3.2 billion cost of providing redress.

4 comments so far. Why not have your say?

John Smyth 3

Aug 30, 2011 at 12:24

Why did they not stop it while it was taking place? They are great at getting tough after the event but useless at prevention.

Everyone else in the financial services and insurance industry knew it was going on the same as the mis-selling of bonds by banks and building societies but the good old FSA just ignored it until they were forced to acknowledge it. Could that have been because of their cosy relationships with the banks and insurance companies ?

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David Irving

Aug 30, 2011 at 12:54

From the headline, I thought this article was about a couple who had received £215 million in compensation for PPI mis-selling. Imaging my disappointment........

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Julian Stevens

Aug 30, 2011 at 13:13

'The treatment of PPI complainants has left an indelible stain on the financial industry’s record,' said Ms. Cole. And, as John Smyth says, what about the equally indelible stain on the reputation of the FSA for having failed to stop the problem mushrooming into a nationwide mis-selling epidemic whilst the FSA concentrated instead on kicking the IFA sector to death, even though its failings are, by comparison, relatively trivial? How about a bit of targeted, proportionate and preventative regulation for a change instead of yet more getting everyone else to mop up the mess after the brown stuff's hit the fan and caused a national stink?

Ms. Cole goes on to say: 'We remain 100% committed to ensuring that where consumers were mis-sold PPI they will receive the appropriate redress from firms" Er, yes, but what about measures to prevent such a huge-scale mis-selling epidemic ever happening again, particularly amongst the 16 firms foud to have been responsible for 92% of this latest one? Were any of them an IFA practice, you can bet your boots that the FSA would down on it like a hundred tons of hot bricks, with fines, sanctions, orders to commission skilled person reports (at vast expense) and probably a disqualification or two. But not, it seems, when it's banks. Never when it's the banks.

The FSA loves to talk about "learning lessons", yet somehow or other it never seems to.

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Paul Nedas

Aug 30, 2011 at 17:30

Could you please update your original article "FSA seconds more staff to strengthen enforcement" published July 2010 http://citywire.co.uk/new-model-adviser/fsa-seconds-more-staff-to-strengthen-enforcement/a411517

I see that FSA apart from Lloyds they also borrowed staff from the Libyan Central Bank. Can one assume that the Lloyds people were able to provide valuable insight into misselling? I just wonder what relevant expertise the guys from Libyan Central Bank were able to provide.

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