The Financial Services Authority (FSA) has confirmed that it will consider banks' pleas for a deadline over personal protection insurance (PPI) mis-selling complaints as ministers declare the regulator unfit for purpose.
The FSA has responded to calls from the British Bankers’ Association (BBA) to set a deadline next year for the stream of complaints perpetuated by the mis-selling of PPI insurance.
Already, the Financial Ombudsman Service says that it expects to receive 385,000 new complaints in 2013/14. Some banks only began contacting potential claimants last November after being ordered to do so by the regulator, while claims management companies continue to drum up business through strong advertising.
The BBA would prefer that this stream of complaints did not go on indefinitely, and has asked for a deadline of May 2014 (read more).
The regulator is set to discuss the matter further with other groups, but insists that the board "would need to be convinced that any proposals would be in the interests of consumers."
Any compromise agreement is expected to include the condition that banks pay for a widespread advertising campaign to alert the public to the developments.
Regulator "failed consumers"
The FSA has recently faced an astonishing attack by the Treasury Select Committee, who accused it of letting down UK consumers.
The committee’s chairman, Andrew Tyrie, described the regulator as "a body that failed consumers badly," adding that its benefits "were far from evident."
The committee said that the soon-to-be replacement, the Financial Conduct Authority, had to adopt a new approach to regulation to restore its credibility.
"If the FCA simply picks up where the FSA left off, consumers will suffer again," Mr Tyrie added.
Do you think banks are right to draw a line under PPI claims? Do you believe the financial regulator has failed consumers? Let us know by leaving a comment below!
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