Customer complaints about the mis-sale of payment protection insurance (PPI) could run into tens of thousands annually as confidence in the industry haemorrhages, financial research analyst Defaqto has warned.
The Financial Services Authority is currently conducting a forceful regulatory enquiry into the industry and has proved its commitment to enforcing its findings by imposing a penalty fine of £610,000 on GE Capital Bank for mis-sale.
More and more customers are becoming aware of the inadequacy of the information they were given when they bought the product and bringing their cases to the regulator's attention, while a forthcoming enquiry from the Competition Commission will further undermine the industry, Defaqto found.
But the analysts warned customers themselves could lose out as a result of the controversy surrounding PPI.
PPI providers could be compelled to replace the lost revenue from PPI by charging increased rates and fees on loans and credit cards, Defaqto suggested – and these generalised charges would impact on all customers, not just PPI users.
The possibility of the introduction of compulsory bank charges loomed this week as the incoming chief executive of Nationwide, Graham Beale, claimed that "fee-based banking is a fairer proposition" than free bank accounts.To learn more about credit card protection, click here.
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