And where are the emails and letters urging banks to not pass on interest rate reductions? Even pressure from the highest ranks of government has been ignored by these masters of the universe that live cocooned in their ivory towers.
Braintree, Essex (PRWEB) December 7, 2008
Lenders are likely to ignore moves to rein in banks that consistently 'mistreat' their customers, according to one industry commentator.
The government announced in last week's Queen's Speech the intention to put the banking code rules onto a statutory footing. They currently operate under a voluntary regime.
But Sara-Ann Burgess, the managing director of specialist payment protection insurance provider Burgesses, believes that this will make little difference to lenders that have consistently profiteered off their customers over many years.
She said: "The Financial Services Authority's (FSA) guidelines on treating customers fairly have been about for some time now, but we have yet to see banks and other lenders rush to put them into practice.
"Sure they have paid lip service in their annual reports about listening to the wishes of their customers and product design being in response to customer demand. But what customers demanded that lenders put pressure on them to sign up to expensive single premium mortgage payment protection insurance (MPPI)?
"And where are the emails and letters urging banks to not pass on interest rate reductions? Even pressure from the highest ranks of government has been ignored by these masters of the universe that live cocooned in their ivory towers."
Talks are underway about replacing the industry-inspired code with one that is under the command and control of the FSA. But there are worries that the FSA is already overburdened and struggles to recruit enough well-qualified staff. Assuming responsibility for overseeing how banks treat their customers would greatly increase its workload and risk reducing the organisation's effectiveness across its entire remit.
Burgess added: "If banks were serious about customer welfare they would have made sure that all their branch managers were treating customers fairly years ago - not permitting them to carry on selling grossly over expensive insurance that did not serve their customers well, but did serve to boost the bank's profits.
"I would urge everyone that is seeking to take out insurance cover in these trying economic times to look at independent providers like British Insurance where they can be assured that we are acting in their interest in trying to secure the most comprehensive cover at the best price."