MSE News: FSA gives complaints extension to recent PPI mis-selling victims

Former_MSE_Guy

This is the discussion thread for the following MSE News Story:

"Many victims of debt insurance mis-selling will get a temporary extension to the time they have to complain to the Financial Ombudsman Service, if rejected by their lender ..."

Read the full story:

FSA gives complaints extension to recent PPI mis-selling victims

di3004

Thanks Guy.

This is good news!:T:T

Oscar_The_Grouch

Ok - First things first: I don't work for a PPI provider, so all I'm giving here is my opinion rather than trying to gain any advantage.

Now on with my views.

So how far are the FSA going to move the goalposts this time? The mismanagement of the insurance industry by the FSA has been monumental. First we have prescriptive rules to adhere to that set out clear instructions and time constraints. We set up audit and compliance structures to deal with these rules and then the FSA decide that a "principle based" policy would be better - just after the industry has spent countless millions meeting the old requirements. The FSA happily told us "if you are complying with the old rules, you'll be complying with the new ones". What they didn't say was "if you want to relax the rules, we don't care" but that's what they meant.

The relaxation of ICOB into ICOBS came about mainly because the FSA suddenly realised they couldn't police compliance with their own regulations. It was nothing to do with being fair to consumers and the industry; it was about their own lack of preparation. To divert everyone from this, they made huge noises about "Treating Customers Fairly". TCF was all about how a company would have to justify to the FSA that they had adequate systems and controls in place to ensure customers were treated fairly; not that they were complying with any rules or regulations, but more that they understood the ethos of "Principle 6". It was made clear that the FSA would be carrying out arrow visits to different firms at the beginning of 2009 to ensure that TCF was firmly embedded. As expected, nothing happened and no visits were carried out because once again the FSA couldn't actually do what they themselves had set out to do.

So now we have another set of mobile uprights. The idea that complainants have 6 months to refer their case to the FOS has been in place since before the IOB became the FOS. The FSA, in all the years that PPI has been regulated, have done nothing to deal with the massive unfairness of the policies and selling practices of the banks (the only reason PPI costs so much is because it lines the pockets of the bankers - not the insurers). Now that the spotlight is on them, their only response is "Err.... We don't actually know what the hell we're doing and in 6 months time the Government will announce that we're to be replaced so we may as well carry on doing what we do best - muck everything up again". That's all this extended complaint timetable is. It means that insurers cannot close off complaints because there is a slim chance that someone may decide to refer the matter to the Ombudsman IN A YEARS TIME!!!

I don't like PPI. I think that in the right place and for the right people, it's a sound solution to risk transfer (let's not forget that this is what insurance is about). Its maladministration lies firmly with the banks and their insistance that it's provided with every loan, credit card, overdraft and other debt, regardless of whether it's the correct solution for the customer or not. It's not the right solution for me and I won't buy it. The problem is that it's a solution which allows banks to make money and provide unsecured loans at the same time and this is something the FSA stumbles over. If they ban the insurance or severely limit its saleability, several insurers will end up out of business and the banks will say "we couldn't lend because the FSA took away one of the risk transfers". So instead they make the decision to increase uncertainty for the insurers whilst at the same time stretching the resources of the FOS.

Is it any wonder the Conservative Party at the General Election advised they would be scrapping the FSA! Let's hope the new Government will be able to follow up on this. Of all the quangos and useless organisations set up by Labour, the FSA has to be the biggest waste of money, time and effort and I for one will not be sad to see an end to its sorry and pointless existence.

Rant over.

Annisele

I don't work for a PPI provider either, but I foresee mass confusion with this one. The messing around with time limits for mortgage endowments (some people ended up with more than three years from receipt of their first red letter) caused much fun and games, and I suspect this will too.

Message to anybody actually wanting to make a complaint to FOS: please get on with it and don't wait until the last possible minute - you don't want to be timebarred because you misunderstood the rules!

halphy

Think id have to reply to final response straight away!