Watchdog must punish parasite of mis-selling

Once again Jeff Prestridge of The Daily Mail has written about the scandal of PPI mis-selling.

In his article he argues:

"When Natalie Ceeney, head of the Financial Ombudsman Service, claimed a few weeks ago that some big banks were treating customers unfairly, she did not name names.

The issue related, inevitably, to payment protection insurance policies, which banks wrongly sold in their millions. Ceeney said the offending banks were  not looking fairly at complainants’ cases on their individual merits but were ‘managing complaints down in line with the money set aside for compensation’.
Ceeney did not single anyone out, but I bet one bank she had in mind was Lloyds. Even now, of all the complaints that Lloyds rejects that are then pursued by the Ombudsman, 86 per cent are won by the consumer. In other words the bank rejects far too many cases when it ought to pay up.

That conclusion should be clear from the figures alone, but last week an undercover operation gave it fresh emphasis. A Times reporter posing as a complaints handler for Lloyds revealed the bank did indeed have a deliberate ploy of fobbing off complainants to avoid paying compensation.

Let us hope the new Financial Conduct Authority will step in and penalise Lloyds’ directors for this. It should do so swiftly, especially given the determination of its boss Martin Wheatley to get tough on financial services miscreants.

But let’s make sure enforcement does not stop there, because there is another culprit in this shabby process – Deloitte. When the accountancy giant is not doing its day job of helping firms avoid tax, it provides services including complaints handling, which it was doing for Lloyds in relation to PPI.

In fact, a lot of Deloitte’s work arises when banks such as Lloyds get into trouble with the watchdog and need an ‘independent’ hand to sort things out. Deloitte’s standing has been so high that it has even undertaken work for the Financial Ombudsman Service and the savers’ lifeboat, the Financial Services Compensation Scheme.

But now Deloitte appears as guilty as the miscreant banks. Regarding the Lloyds scandal, Deloitte says no more than its role was to ‘process PPI mis-selling complaints in accordance with the bank’s policies and procedures’.

As I read it, Deloitte is saying that fairness and good practice do not come into the equation. Complaints handing is not about putting things right, it’s about doing whatever Lloyds says. Justice and integrity be hanged.

Lloyds lost any remnants of its once high reputation years ago. Now it is only known as a customer-bashing millstone hanging round taxpayers’ necks.

Deloitte’s reputation, after these revelations, deserves to head in a similar direction. If ever there was a parasite profiting from the mess of bank mis-selling, it is Deloitte. It deserves to be in serious regulatory trouble."