Speaking at a conference held by Which? on financial services reform, Margaret Cole, interim managing director at the FSA, rejected claims made by Eric Leenders, executive director of retail at British Bankers’ Association, that many consumers continued to trust high street banks.
Cole said: “I am not in the business of banker bashing, but I do have to say if you look at the evidence unfortunately in relation to payment protection insurance, which has been the most recent saga, it was really the big retail banks who were the major players.”
She claimed mis-selling issues over the last 20 years have cost consumers £15bn, not including the £9bn cost of PPI mis-selling.
Cole continued: “It is particularly striking to me that when we have been doing more business model analysis we see how much of the business models of major institutions are being driven by aggressive product sales. If that remains the business model there is always going to be a high risk of mis-selling of products.
“We have to be prepared in the new culture of the FCA to be more interventionist to head off those issues before they really get going.”
