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MSE News: New finance watchdog can ban dodgy products
Former_MSE_Helen
Posts: 2,382 Forumite
"Plans are being set in motion to allow the Financial Conduct Authority to ban dodgy products before they are mis-sold...."
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Comments
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Usual red top reporting at MSE hu?
Payment Protection Insurance in most cases was not an inherently flawed product but was terribly miss sold. In the case of PPI therefore it would not have been stopped before the miss selling happened because it was the miss selling that was the problem.0 -
What exactly is the definition of a 'dodgy product'?0
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InsideInsurance wrote: »Usual red top reporting at MSE hu?
Payment Protection Insurance in most cases was not an inherently flawed product but was terribly miss sold. In the case of PPI therefore it would not have been stopped before the miss selling happened because it was the miss selling that was the problem.
I was going to say the same. The problem is the system it was sold under and the incentives offered, not the product.
Complete hot air from the FCA in this case. Bluster to gain credence in a body which has been found sadly lacking in terms of audit and compliance checks (FSA and FCA are one and the same imo).0 -
InsideInsurance wrote: »Usual red top reporting at MSE hu?
Payment Protection Insurance in most cases was not an inherently flawed product but was terribly miss sold. In the case of PPI therefore it would not have been stopped before the miss selling happened because it was the miss selling that was the problem.
If banning a product (regardless of weather it was inherently flawed) is the only effective way to prevent massive consumer detriment then it is a power that is reasonable to exercise.
Banks were incapable of marketing PPI without mis-selling it - a fact illustrated when they voluntarilly withdrew it from the market in the wake of the sales restrictions placed upon it by the Competition Commision.0 -
It was loaded with ludicrously high commission. Customers weren't just buying insurance, they were paying the banks a fortune for (mis-) selling it to them.InsideInsurance wrote: »Payment Protection Insurance in most cases was not an inherently flawed product
This is endemic in insurance. It's horribly difficult to sell, but the market is oversupplied. Unfortunately the oversupply doesn't create a buyer's market. To get more customers, instead of cutting prices, the sellers just spend more and more on marketing channels and pass the cost on to the customer.
This has corrupted the whole of retail banking, to the point where the banks are now just insurance-peddlers who do banking as a come-on."It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis0 -
When I first sold PPI it was a monthly premium where the lender got a 12% commission.
When it became a lump sum policy accruing huge chunks of interest and had bag loads of commission and reinsurance behind the scenes it became an unreasonably priced cart of dung.
Nothing wrong with the basics of the cover though.0 -
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Alpine_Star wrote: »If banning a product (regardless of weather it was inherently flawed) is the only effective way to prevent massive consumer detriment then it is a power that is reasonable to exercise.
I have no issues with the concept that a regulator can ban a product, I had issues with the article by MSE which said it would mean "dodgy products" could be stopped before miss selling happens and then goes on to talk about PPI which isnt a dodgy product but a miss sold product.
As to people talking about the amount of profit the retailer makes from the sale.... not sure how that a product dodgy or not? There are many products with much bigger margins than PPI out there!0 -
I'm always at a loss to understand why just about everything is mis-sold. Doesn't anyone mis-buy anything nowadays?
It would be a refreshing change for someone to post "I've been rather lax, not read my application properly and mis-bought (fill in the blank space)".
Is it now impossible for anyone to take responsibility for their own actions these days and blame their dog/cat/budgie/the weather etc. or just about anyone else for their errors?
More MSE dross! When are the supermarkets (not) going to reduce their fuel prices again? We must be well overdue another article on that no news too.0 -
Did once have a customer that said we had to speak to his budgie about a car accident before "putting him on"..... given I cant speak budgie I was never sure if the policyholder was blaming the budgie for the accident or just thought he'd talk more senseoldagetraveller wrote: »Is it now impossible for anyone to take responsibility for their own actions these days and blame their dog/cat/budgie/the weather etc. or just about anyone else for their errors?0
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