Sara-Ann Burgess, director at payment protection insurance (PPI) specialist Burgesses, says Lloyds TSB, HBOS and RBS have long had a case to answer in relation to the premiums they have charged customers for PPI policies.
She also believes that in many instances customers across the market have been sold policies inappropriately.
Now that the Government is to take ownership of RBS, and become a leading shareholder in the combined Lloyds TSB and HBOS super bank, she wants to know what energy will be invested in making sure their operations are in line with the rules set out by Financial Services Authority (FSA) in its Treating Customers Fairly principles.
“Now that the Government is actually going to become a stakeholder and indeed owner of some of these financial institutions it is more important than ever that the FSA is seen to stand tall and do the job it has been tasked with,” says Burgess.
In recent years there has been a significant amount of criticism levelled at the PPI market over the way high street providers have gone about designing, pricing and selling their policies.
“If the Government is going to become a shareholder in these institutions then it must ensure they are run to a standard which is exemplary,” says Burgess.
“Unfortunately the finding of the FSA, the Office of Fair Trading, Citizens Advice and Which? Magazine would suggest this is not the case. Indeed the recent £7m fine slapped on Alliance & Leicester for failings in this market shows how costly non-compliance can be. Given than tax payers have already bailed out the banks, they certainly do not want to find themselves paying their fines as well.”
Burgess urged consumers worried about their job and their financial security to make sure they had sufficient PPI in place and that they bought well priced and effective policies.
“Unfortunately the PPI market has been tarnished by greedy providers who have refused to put their customers first. By working with independent intermediaries such as British Insurance, customer can be sure they are getting excellent value and well designed policies that actually meet their needs.”
Meanwhile she said the Government would have to realise that its stake in the high street banks would bring its own responsibilities and if it did not live up to them then criticism would be forthcoming.
