Financial services mis-selling: regulation and redress inquiry
Closed
What the inquiry looked at
“Mis-selling of financial services products, which may involve providing customers with misleading information or recommending that they purchase unsuitable products, can cause serious harm. It has occurred across many different product areas, including bank accounts, consumer loans and insurance. Financial services institutions have paid over £18 billion in compensation to purchasers of payment protection insurance following regulatory action; the Financial Services Authority said that "stronger action sooner could have limited the growth of the problem". National Audit Office report The National Audit Office have conducted a study to consider how well the Financial Conduct Authority, the Financial Ombudsman Service and the Financial Services Compensation Scheme work together to detect problems and secure redress for consumers. It looks at how the Financial Conduct Authority regulates financial services institutions to counter mis-selling. It will also examine whether the regulatory regime provides the right incentives to deter mis-selling, and how it identifies and responds to mis-selling risks.”
The committee's words, from the inquiry page on parliament.uk ↗.
What it found
We are disappointed that claims management companies have made up to £5 billion from payment protection insurance claims, out of compensation that should have been paid to victims of mis-selling by financial services firms. Departments and regulators have been far too passive in allowing this to happen. Many victims of payment protection insurance mis-selling have been waiting years for a decision from the Ombudsman and for the compensation they are entitled to. The Financial Conduct Aithority (the FCA)
has taken action to tackle some of the root causes of mis-selling of financial services, but there remain substantial risks of further mis-selling, as well as cultural problems within firms that make mis-selling more likely. The FCA and the Treasury must do more to know how much mis-selling is happening now, and which regulatory activities work best to prevent it.
What the government said
No government response is linked to this report.
How the inquiry ran
Each dot is a dated item listed on this page, from the inquiry's opening on 17 February 2016 to 13 May 2016.
- Oral evidence 2 Mar 2016
- Report 13 May 2016
What it recommended
The committee's recommendations are not listed here yet. Read them in 41st Report - Financial services mis-selling: regulation and redress ↗ on parliament.uk.
Evidence
Oral evidence sessions 1
- 2 Mar 2016No witnesses recordedparliament.uk ↗