CompaniesMay 9 2013

A right to redress

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ByCraig Bernhardt

For the financial services industry to repair its reputation, it is important that the victims of mis-selling get back what they are owed. Awarding consumers compensation that is rightfully theirs is undoubtedly important, but it only addresses the symptoms of mis-selling. The crucial point is that consumers get the right advice in the future to ensure they do not fall foul of financial mis-selling again. Where consumers have had good advice, that information strengthens the relationship between client and adviser or provider. In contrast, where mis-selling has taken place – whether that be with endowments, investments, or even packaged current accounts – consumers have the right to have their money returned.


Let us take payment protection insurance as a prime example. Consumer groups and the Financial Ombudsman Service have worked hard to try to make the claims process for PPI as simple as possible.

Despite this, some consumers still are not making a claim where they have been victims of mis-selling. As many as 25 per cent of those polled recently by YouGov do not feel they have enough knowledge to make a claim on their own and 22 per cent say they do not have enough time.

Calculations by Emcas show that there is still £18.3bn owed to consumers who are yet to act. I believe that those who have been victims of mis-selling are entitled to their money back. Whether done independently or through a professional claims management company, I urge all consumers who have been affected by mis-selling to take action to reclaim what is rightfully theirs.

Because the mis-selling of PPI was so widespread, and occurred over such a long period of time, the scandal has dominated any debate about financial mis-selling and left consumers confused about whether or not they have the right to make a claim.

Ironically the publicity about the PPI scandal has had some unintended consequences. First, we have seen a proliferation of companies who have set themselves up to capitalise on this boom in financial claims. The way in which many have operated (for example, charging fees up front and deluging people with text messages) has been instrumental in turning consumers off from making a valid claim.