Mass mis-selling of products such as PPI had tarnished trust and loyalty between banks and consumers. The recent payment protection insurance scandal had skyrocketed the UK bank industry’s bills up from £1.9billion to £32billion in six years.
The Public Accounts Committee is calling on government departments and regulators to do more to protect consumers from financial product mis-selling.
The large activities of scammers had allowed them to curtail about £5 billion from unsuspecting consumers who only want to receive their PPI refund. The public perception of banks making it perplexing to make a claim and withdrawing information from consumers had urged many to work with potential scammers and other representatives.
The PAC said the Treasury, the Ministry of Justice, the Financial Conduct Authority and the Financial Ombudsman all have been “passive and slow” in taking responsibility for the situation. The lack of insight in determining a loophole and its consequences shows the troubling performance of the departments, it added.
Chair of the PAC Meg Hillier said: “The widespread mis-selling of PPI is a vivid demonstration of the risks facing consumers in the financial services market.”
The PAC said the FCA did take some action. But tackling the bank culture and minimising the motivation to increase work volume and re-incentivise sales personnel to focus on consumer usage is not enough.