PPI mis-selling needs its own investigation

Sept. 5, 2012 - PRLog -- Source : Guardian Newspaper September 2012 - PPI Miss-Selling Needs Its Own Investigation

It has taken two decades for the City's chief regulator to tell the banks, building societies, insurers and investment firms that they fleece their customers and that they do it systematically.

Martin Wheatley, managing director of the FSA and boss of the soon-to-be-created Financial Conduct Authority, says he will take personal charge of reforms that will put an end to bonus schemes that encourage mis-selling.

The FSA ignored the warnings for many years. In 2003 a former Lloyds TSB financial adviser recounted how she was trained to trick customers into buying expensive products that meant most of their savings were diverted into her bonus package.

The following year Barclays was found to be making 10% of its global profits from the sale of payment protection insurance (PPI) in the UK. The cost of the insurance was deliberately disguised and most claimants were told they failed to qualify for a payout. A plea to then FSA boss John Tiner for an investigation fell on deaf ears.

Wheatley has warned firms they risk huge fines if they continue with the old sales tactics.

This information is not new and the FSA should have stepped in far sooner than they did to stop the escalation of such a flawed investment product. Too much greed, bonus culture and high unethical targets to be met were adopted in the banks and now they must face justice like anyone else that has been found of wrong doing.

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