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BLOG: Mr Regulator, why the deathly silence on PPI?

Steve Bloor
Written By:
Steve Bloor

Steve Bloor of Open Resolution calls for the FCA to stop all the chatter and take some action against banks failing to settle PPI complaints.

There’s been an avalanche of data coming out over the last month or so from the Financial Conduct Authority and the Ombudsman showing that banks are continuing to turn a blind eye to settling PPI complaints. But the most startling feature is the deathly silence of the regulator on the issue.

It seems that the FCA, for all its chest-beating bluster about championing the rights of financial services consumers, like its predecessor the FSA is choosing in Nelson-like fashion to put the telescope to its blind eye and see no problems. Let’s start with the most recent data first. The amount of compensation for mis-selling PPI fell again in February to £409 million from £439 million in January. At its peak last May banks were paying out £730m but the trend has been almost inexorably downwards since then.

Turn the clock back a week or so and the FCA published the latest half-yearly complaints statistics for the second half of last year. This showed that the number of PPI complaints made in the second half of the year had increased to 2.1 million. Now rather cunningly, unlike the Ombudsman, most of the detailed statistics related to PPI are lumped into a wider category called “General Insurance and Pure Protection Complaints” but it’s pretty safe to assume that the majority of these relate to PPI. And when you delve into the detail and look at banks’ “Uphold” rates in this category they make most interesting reading. Santander is upholding 84% of complaints in favour of the customer but, at the other end of the spectrum, Bank of Scotland is upholding just 32%. Indeed when you look closely, of the major banks, all those with the worst “Uphold” rates are the banks in which the Government has a substantial shareholding.

So here we are – we’ve got the Ombudsman being buried under 10,000 PPI complaints a week, new PPI complaints to banks continuing to rise, the banks (particularly those under State control) rejecting increasing numbers of complaints, compensation falling and deathly silence from the FCA. We all love a conspiracy theory but I’ll leave you to draw your own conclusions.

Come on Mr Wheatley, we’ve heard all the tough talking. Let’s see if you really have got the cojones.

Steve Bloor is managing director of www.openresolution.co.uk , specialists in resolving consumer disputes related to financial products and services.