Complaints to Ombudsman rocket 35%

Complaints to the Financial Ombudsman Service about mortgages rocketed by 35% in the last year.

There were 9,537 mortgage-related complaints, compared with 7,067 in the previous year, says the FOS’s annual report covering the 12 months to the end of March.

Of the complaints, 16% were against intermediaries, down from 18% the previous year.

The annual report shows that Payment Protection Insurance is the most complained-about product ever, accounting for 60% of its workload. Altogether, there were 157,716 complaints about PPI.

In total, the FOS had 1,268,798 complaints, with one in five (264,375) escalated to disputes. The number of complaints that turned into disputes was up by 28% over the previous year.

FOS chairman Nicholas Montagu said that media coverage had made large numbers of consumers aware for the first time that they might have been mis-sold PPI policies.

He said: “We received over 150,000 of these cases during the year – the highest number we have ever received in a year about a single financial product. We are still receiving PPI complaints at the rate of over 1,000 new cases every day.”

Sarah Brooks, director of financial services at Consumer Focus, said: “PPI continues to be a thorn in the side of this industry.

“With all that has happened, consumers shouldn’t need to take their PPI claim to the Ombudsman to get their money back. Banks now need to wipe the slate clean by dealing with any claims and compensation payments quickly, efficiently and fairly.”

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Banking on the move – new app promises change

A new mobile phone app has been developed for banks and building societies which enables customers to use their mobiles to access their accounts and transfer money from one account to another.

The app, from iState Systems, also allows customers to access up-to-date product information and send information and documents.

This means that a client could use the app to complete a mortgage application, for example, answering questions and taking a photo of wage slips or a P60 on their phone to submit it straight away.

It also works for brokers who can submit information on behalf of their clients in the same way.

iState already has its first customer – National Counties Building Society, which is now the first building society in the country to enable their customers to view their accounts and complete transactions using a mobile app.

iState Systems, founded by Barry Yager and Nelson Wootton, has called the product Apprivo, which will be sold to other building societies, banks and financial service companies.

Yager said: “We really believe that Apprivo and mobile phone technology will permanently alter the way that financial institutions do business and the way that they interact with their customers.

“Apprivo enables banks and building societies to provide their customers with new, highly useable, highly competitive services.

“It means customers can now progress a mortgage, loan or savings account at the touch of a button on their mobile phones; intermediaries will have a new instant-access interface; and it reduces the need for documents to be sent in the post, enabling banks and building societies to receive them quicker and more accurately.”

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Angry advisers hit out at FSA over string of staff departures

An independent wealth management firm has hit out at the FSA, saying that it should be setting a better example.

Addidi Wealth says that high-profile members of the FSA who have left, or are leaving, the regulator should be held to account.

Meanwhile, another leading IFA has separately told the Treasury Select Committee that high-profile members of FSA staff should not simply be allowed to walk away ‘without a care in the world’.

Anna Sofat, managing director of Addidi Wealth, said: “There is a real issue right now around how the FSA calculates the Financial Services Compensation Scheme levies.

“While I agree that those who have received poor advice should be compensated, the way in which the regulator is demanding that IFAs deal with Keydata clients is disproportionate.

“The FSA is insisting that firms which sold Keydata products must go through all their books and compensate individuals, whether the client has complained or not. Keydata products can’t have been bad for everyone or the FSA would never have allowed them to be sold in the first place.

“The FSA is creating the assumption that everyone has been mis-sold and some of these firms which are having to review every single Keydata case could go under, due to the effect that the potential compensation claims will have on their capital adequacy levels.

“As for the interim levy being imposed on IFAs due to the Keydata debacle, Addidi never sold any Keydata products, and yet we have to pay this interim levy at short notice, even though we agreed this year’s budget some time ago.

“We now have to cater for this unexpected extra cost, even though we are not responsible for any of the mis-selling.

“Clearly, the FSA must encourage best practice, but surely a better way to incentivise advisers to be compliant is to make the polluter pay – by charging higher FSCS fees to those firms with a high level of upheld complaints, and lower fees for those with fewer successful complaints.

“Networks have traditionally prevented their members from doing high-risk business in order to keep their compliance costs down, so why can’t the FSA devise a levy system which reflects the practice of individual firms?

“The FSA seems to be living in a bubble, when it should be setting an example to the industry by holding its own personnel to account when things go wrong.

“A large number of high-profile figures have left the regulator recently to take up highly paid jobs elsewhere, thanks to their regulatory experience, but they will never be held to account if things go wrong.

“Fred Goodwin’s pension was cut for poor performance, so why should regulators who are paid by the taxpayer not face similar accountability?”

Separately, PanaceaIFA chief executive Derek Bradley has written to Mark Garnier MP, a member of the Treasury Select Committee, saying that key figures who have left the FSA should be held to account by the committee.

Bradley says: “Given the huge cost involved to the industry and ultimately consumers, the TSC should as a matter of priority call all these key figures before them and get to the truth surrounding the exact reasons behind their departures.

“After all most of them, if not all, have played a very key part in the RDR design and implementation processes. To see them simply walk away without a care in the world before January 1, 2013, is a manifest failure in duty on their part.

“Additionally, it shows a distinct lack of respect for their colleagues, who will be left to carry the can if all goes wrong with the TSC and of course those they regulate.”

Margaret Cole, managing director of the FSA, has already left, while chief executive Hector Sants has announced his departure, as has Peter Smith, former head of investment policy.

Other top-level departures include those of Amanda Bowe, RDR head, managing director of supervision Jon Pain, managing director of risk Sally Dewar, and chief operating officer Mark Norris.

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First Complete adds serious illness specialist to panel

First Complete, part of the LSL group, has added PruProtect to its protection panel.

This brings the total number of life companies on the panel to six, joining Ageas, Aviva, Bright Grey, Friends Life and Legal & General.

PruProtect has a growing portfolio of protection products including a flagship serious illness plan, which covers 161 conditions compared to the market average of 35 critical illness conditions.

Jon Round, chief executive of First Complete, said: “We look to continually improve our panels and what they offer to our members.

“Protection is at the heart of the proposition provided by First Complete, so adding PruProtect to our protection panel helps us to increase both quality and choice for our members and for their clients.”

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Yorkshire BS gets set for expansion

A dozen new branches are to be opened by Yorkshire Building Society over the next two years, and will also grow its agency network.

Chris Pilling, chief executive, said: “Our branch and agency network is at the heart of Yorkshire Building Society and I’m delighted that we are able to announce this expansion when other financial institutions have been closing theirs.

“We are committed to retaining a strong presence on our high streets, providing our customers with access to a wide range of good-value financial service products backed up with the exceptional personal service they value.

“Our recent merger activity highlighted the value we place on our branch network, with all the branches we acquired remaining open, even in the small number of locations where there has been an overlap with another Yorkshire branch.

“These mergers have seen the Society grow its branch network by 65% from 135 to 224 in three years.”

News Source: http://www.introducertoday.co.uk/news_features/yorkshire-bs-gets-set-for-expansion

RBS's 'last bank in town' ads banned from TV

Two ‘last bank in town’ TV adverts for NatWest and the Royal Bank of Scotland have been banned by the advertising watchdog.

The ads attracted two complaints which said there was at least one place, Farsley in Yorkshire, where NatWest had closed its branch despite being the last bank in town.

RBS agreed this was so, as usage of the Farsley branch had fallen, but said that the ad stated that their commitment was to continue providing ‘banking services’ wherever they were the last bank in town. The ad showed a mobile service.

The bank did not go as far as to say that they would commit to keeping all branches open. It said Farsley residents had access to another branch in Pudsey just 1.5 miles away.

But the ASA upheld the complaints, saying the ad would be interpreted by viewers to mean that NatWest would not close a branch where it was the last one in town. It felt that the ad implied that a branch was a bricks and mortar building, not a mobile service.

In a busy week for the ASA, it also upheld a complaint from someone who had received a text message from a claims management firm.

The message said: “Records passed to us show you are entitled to circa £3,250 in compensation from the mis-selling of PPI on your credit card & loan. Reply STOP or PPI for info.”

The complainant had never taken out PPI, and challenged as to how the firm, DARH Ltd, could substantiate its claim as to having had records passed to it.

DARH did not respond to the ASA, which upheld the complaint. The ASA also noted that the text message did not contain information about the identity of the marketer and that it was in breach.

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New powers for Bank of England to set LTVs

Chancellor George Osborne is set to hand new powers to the Bank of England to regulate the mortgage market by allowing it to set loan-to-value ratio limits.

The new powers would be aimed at controlling busts and booms, by banning unsustainable mortgages and preventing another housing bubble, or stimulating more lending.

The Financial Policy Committee (FPC) at the Bank will be able to set LTV limits – for example, setting them at 75% if it feared a credit bubble, or at 95% if it wanted to encourage more lending.

Osborne told MPs in a debate on the Finance Bill that the new committee, which has already been set up but does not come into legal force until next January, is to be led by the Governor of the Bank of England.

He said: “Its job is not just to try to moderate a credit boom but to try to alleviate a credit bust.”

The committee’s job will be to prevent lenders repeating the scenario of the pre-2008 credit crunch. Then it was commonplace to offer mortgages with 125% LTVs in the belief that property prices would continue rising, along with people’s ability to repay their loans.

Osborne said that the previous light-touch regulation had been an ‘unmitigated disaster’ for the economy. He said the FCP would be ‘entrusted with the stability for the whole financial system’.

Osborne said: “In many senses, this is the bread and butter of people’s daily lives, and it is very important that we understand that, as we create these instruments of policy that don’t currently exist.”

He said of the Bank’s new powers that it did not have to use them, adding: “I should say that these are just possibilities – they are potential tools that the committee might want to use.”

News source: http://www.introducertoday.co.uk/