Bad competition in practice - PPI
-Financial Ombudsman Service estimates firms sold policies worth around £50bn
-billions of £ have been paid out in compensation
•Lloyds-£17bn
•Barclays-£8.4bn
•RBS-£4.9bn
•HSBC-£3bn
RBS - four personal current accounts
- Select account - normal current account, doesn’t charge a monthly fee
- Reward account - added rewards on eligible household bills paid by direct debit, must pay in £1,250 a month, account costs £2 a month
- Reward Silver Account - added European travel insurance, phone insurance, fee-free debit card purchases abroad, a taste card that offers deals on restaurant meals, preferential rates on travel money, costs £10 a month
- Rewards Platinum Account - added worldwide travel insurance, Green Flag UK car breakdown cover, up to 40% off cinema tickets, the tastecard, preferential rates on travel money, costs £20 a month
Save Our Savers
-pressure group who believed savers must be ‘supported and rewarded for saving’
-campaigned against:
•devaluation of savings through inflation
•artificially low interest rates
•unfair legislation and taxation
•exploitative financial practices
-wanted providers to pay higher interest rates to savers and make products more transparent
-wanted all fees charged for managing investments and pensions to be made transparent
-no longer an active campaign group
Financial Services Consumer Panel
-independent statutory body
-‘independent voice for consumers of financials services’
-main areas of interest:
•supervision of the consumer credit sector
•consumers’ ability to obtain redress and compensation
•provision of products and services that ‘do what they say on the tin’
•FCA’s remit to deal with the issues that prevent effective competition
•effective consumer representation at EU level
-researched pension scams which resulted in a consultation supporting strengthening cooling off periods and restricting elements of marketing of ‘boiler room’ scams
-wanted a ban on adverts that referred to a specific rate of return
Centre of Social Justice
- independent think tank
- seeks to ‘put social justice at the heart of British politics’
- produced a report called ‘maxed out: serious personal debt in Britain’ which examined levels of personal debt
- report looked at the social and medical consequences of problem debt, calls for an improvement in financial capability and education, better debt advice and improved access to alternative finance (credit unions etc)
Another perspective on price comparison sites
- FCA raised concerns about price comparison websites misleading customers
- noted that 40% of car insurance policies and 25% of home insurance policies are purchased online via price comparison websites
- in 2013, began an investigation into 14 sites (representing 90% of the market) to find out more about certain aspects of the service
- found out that’s some price comparison websites DIDNT make sure customers were given the right info to make informed decisions
- some websites didn’t reveal potential conflicts of interests, such as being part of a larger insurance group
- asked price comparison websites to take action to address these areas
Studying cash savings
- FCA conducted study into cash savings market to see if it was working well for consumers
- 93% of adults have a savings account
- total balances of approx £354bn in just easy-access accounts that they surveyed
- found that the ‘cash savings market is not working well for many consumers’
