After an investigation by the Financial Services Authority into the mis-selling of Payment Protection Insurance (PPI) its conclusions were……well……underwhelming.
Martin Wheatley, the FSA Managing Director, announced that “offering financial incentives to bank staff to sell PPI was the reason why so many were mis-sold.” Hardly a ‘stop the press’ moment is it.
Is it just me or is this bleedin obvious?
My investigation would have gone along the following lines:
1. Walk into your bank where you hold a current account.
2. Deposit £100.00 into your current account.
3. Look vulnerable, old or (ideally) both.
4. Wait for the Double Glazing Sales man / woman (they will have a badge giving them a title saying something like ‘Banking Executive’) to interrogate you on your mortgage, insurance, credit card, savings or all of these.
5. Walk out feeling jaded, confused and dirty.
6. Expect a phone call within 24 hours from a ‘Banking Executive’ because you didn’t keep a straight face during the interrogation and blinked, thus indicating that you wanted to proceed with something completely inappropriate.
In all seriousness……there is a bigger message. The FSA have highlighted that if you give banking staff financial incentives, they will put their own personal greed before the client need. Pretty straight forward action required then……stop sales incentives on bank related products and we can avoid a repeat of the £9 billion compensation paid for mis-sold PPI.
Simple really isn’t it. Or is it……
The FSA has decided not to ban such practices but instead it wants banks to “review their incentive schemes and ensure controls are adequate over the next 12 – 18 months.”
So there you have it – yet more evidence of the power that banks have over Government, their own regulator and anyone looking vaguely old or vulnerable.
It’s only been 4 years since Northern Rock collapsed. No rush I guess.
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