A recent investigation into financial services mis-selling has led to a highly critical report produced by MPs.
Parliament’s Public Accounts Committee has challenged the Treasury, the Financial Ombudsman and the Financial Conduct Authority to do more to protect customers as too little has been done to tackle the cultural problems behind mis-selling.
More than 12 million banking customers were mis-sold payment protection insurance (PPI) and firms have paid £22 billion in compensation since April 2011 but there are substantial and continuing risks that financial services will be mis-sold.
Even though it is "straightforward and free" for affected customers to claim compensation through the Financial Services Ombudsman, claims management companies have made around £5 billion taking 80% of their cases to the Ombudsman.
Committee member and Don Valley MP Caroline Flint said today: “This is money that should be going straight to the customers who were victims of mis-selling. Instead, their situation has been turned into a profit-making exercise by claims management companies, often deploying unscrupulous tactics. We have experienced this before when local law firms ripped off miners and their families of their industrial injuries compensation.
The regulators and the Treasury have been far too timid in tackling this issue. They must do more to make sure that our constituents, who were mis-sold PPI in the first place, are not exploited further by these companies.”