FSA comes under fire for failing to put a stop to PPI mis-selling sooner
22 February 2012 at 17:52
The Financial Services Authority (FSA) has been blasted for not responding to the payment protection insurance (PPI) mis-selling scandal sooner.
According to personal finance expert Annie Shaw, founder of CashQuestions.com, the FSA and the Competition Commission failed to act before the problem became a crisis.
She said: “Regulators were slow to act, A - because they are reactive rather than proactive and B - the banks were making shedloads of money from it and they didn’t want to stop the merry-go-round.”
The expert said that although PPI mis-selling was first identified in 1998, it took the regulator more than a decade to respond as it did not enforce a clampdown until 2009.
Describing why PPI mis-selling occurred, Ms Shaw added: “It allowed lenders to make riskier loans to people with lower incomes or poorer credit histories.”
Her comments coincide with the latest figures from the FSA, which showed redress totalled £441 million in December, amounting to £1.9 billion in 2011.
Posted by Tony Miller