UK – “City watchdog to stick up for ‘ordinary consumers’ FT 24 August 2013.
The FT carried an interview with Sue Lewis consumer chief of the Financial Conduct Authority (‘FCA’) this weekend. It makes disturbing reading. The latest scandal involves the Banks selling worthless credit card theft insurance. When a card is stolen, the Banks already have liability. They referred the customers to an insurance provider who happily sold the thrash insurance that provided cover in the event of theft, which was not in fact needed.
Lewis suggests that the way to restore trust is to crack down harder on the mistreatment of ‘ordinary retail customers’ by Banks. Trust is about the little stuff Lewis says. Things that apparently irritate customers and the FCA are using behavioural economics to help.
If the six year statutory period that applies here, applied in UK, the FCA would not have been able to impose solutions in the credit card case.
This should help the folk in the Financial Ombudsman Office who find the same complaints arising again and again. You would almost think that the Banks simply do not learn from previous mistakes. It is simply that many of the systems in Banks are old IT systems and the Banks are just ignoring it. The Banks have discovered that the FSO isn’t up to the job. It has no teeth because even of the same rubbish turns up 100 times it cannot order the Bank to fix it. Very few of the FSO cases go the High Court – which if they did would put manners on the Banks. We need to take cases to the High Court – that will bring respect – which Fiona Muldoon of the Central Bank feels she has from the Banks. Indeed! Using the 2011 Central Bank Act against Newbridge Credit Union – is stirring stuff. Bank CEOs must be quaking in their boots.
Those of us who have helped a number of people get their trackers back know all about this carry on. Some customers in the same Bank will have had trackers restored and others have been refused. This has happened in circumstances that a lawyer says are ‘on all fours’ as in they are exactly the same circumstances - with one twist. The twist is that when the Bank respond, they send out a long legally constructed letter which denies your claim for various reasons. The difference arises where these are rebutted skilfully - then the Bank concedes. If you don’t respond, you don’t get your tracker restored. Is this appropriate behaviour where there is a consumer pitted against the Bank? Where is the Central Bank on this?
In the traumatic arrears cases, the Banks have put it out that there are strategic defaulters. Most right thinking people are appalled if this were true. It may be. There is no evidence. Similarly, there are strategic deflectors in Banks. Customer correspondence on arrears is not either being opened or attended to within the CPC nor the MARS time limits or not at all. I have seen several different cases which demonstrate a complete lack of any compliance with CPC and MARS. How does this affect a customer that is under stress already?
Lewis argues that since the financial crisis nobody is thinking about the consumer who is paying for the whole thing – this is particularly true in an Irish context. So you would imagine that the Central Bank would be particularly sensitive to this. Ask the Central Bank to tell you how many distressed mortgage customers they have met. But Fiona Muldoon was more concerned with having respect from the Banks than getting the job done. And the Central Bank has apparently found that its bank inspection people cannot ask the right questions of Banks.
Here are four:
Mr Honohan – are you aware that the Banks are not replying to correspondence from customers in compliance with the CPC or the MARS codes of conduct?
Mr Honohan have you asked the CEO to give you a statement in writing approved by the Board of Directors that they have made enquiries to satisfy themselves that the Codes are being implemented in full?
Mr Honohan are you aware that some Banks have refused to restore trackers and at the same time restore tracker mortgages with the exact same circumstances?
Mr Honohan have you or anybody in the Central Bank met any mortgage arrears customers?
The FT carried an interview with Sue Lewis consumer chief of the Financial Conduct Authority (‘FCA’) this weekend. It makes disturbing reading. The latest scandal involves the Banks selling worthless credit card theft insurance. When a card is stolen, the Banks already have liability. They referred the customers to an insurance provider who happily sold the thrash insurance that provided cover in the event of theft, which was not in fact needed.
Lewis suggests that the way to restore trust is to crack down harder on the mistreatment of ‘ordinary retail customers’ by Banks. Trust is about the little stuff Lewis says. Things that apparently irritate customers and the FCA are using behavioural economics to help.
If the six year statutory period that applies here, applied in UK, the FCA would not have been able to impose solutions in the credit card case.
This should help the folk in the Financial Ombudsman Office who find the same complaints arising again and again. You would almost think that the Banks simply do not learn from previous mistakes. It is simply that many of the systems in Banks are old IT systems and the Banks are just ignoring it. The Banks have discovered that the FSO isn’t up to the job. It has no teeth because even of the same rubbish turns up 100 times it cannot order the Bank to fix it. Very few of the FSO cases go the High Court – which if they did would put manners on the Banks. We need to take cases to the High Court – that will bring respect – which Fiona Muldoon of the Central Bank feels she has from the Banks. Indeed! Using the 2011 Central Bank Act against Newbridge Credit Union – is stirring stuff. Bank CEOs must be quaking in their boots.
Those of us who have helped a number of people get their trackers back know all about this carry on. Some customers in the same Bank will have had trackers restored and others have been refused. This has happened in circumstances that a lawyer says are ‘on all fours’ as in they are exactly the same circumstances - with one twist. The twist is that when the Bank respond, they send out a long legally constructed letter which denies your claim for various reasons. The difference arises where these are rebutted skilfully - then the Bank concedes. If you don’t respond, you don’t get your tracker restored. Is this appropriate behaviour where there is a consumer pitted against the Bank? Where is the Central Bank on this?
In the traumatic arrears cases, the Banks have put it out that there are strategic defaulters. Most right thinking people are appalled if this were true. It may be. There is no evidence. Similarly, there are strategic deflectors in Banks. Customer correspondence on arrears is not either being opened or attended to within the CPC nor the MARS time limits or not at all. I have seen several different cases which demonstrate a complete lack of any compliance with CPC and MARS. How does this affect a customer that is under stress already?
Lewis argues that since the financial crisis nobody is thinking about the consumer who is paying for the whole thing – this is particularly true in an Irish context. So you would imagine that the Central Bank would be particularly sensitive to this. Ask the Central Bank to tell you how many distressed mortgage customers they have met. But Fiona Muldoon was more concerned with having respect from the Banks than getting the job done. And the Central Bank has apparently found that its bank inspection people cannot ask the right questions of Banks.
Here are four:
Mr Honohan – are you aware that the Banks are not replying to correspondence from customers in compliance with the CPC or the MARS codes of conduct?
Mr Honohan have you asked the CEO to give you a statement in writing approved by the Board of Directors that they have made enquiries to satisfy themselves that the Codes are being implemented in full?
Mr Honohan are you aware that some Banks have refused to restore trackers and at the same time restore tracker mortgages with the exact same circumstances?
Mr Honohan have you or anybody in the Central Bank met any mortgage arrears customers?
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