|
|
The Financial Conduct Authority (FCA) is ignoring legal cases which mean consumers may be owed around £14bn more than under its own guidelines, the barristers have alleged.
“Consumers could be forgiven for asking whose side the FCA is on. These figures reveal that the UK public are being misled by the banks, with potential compensation on average four times the amount suggested by the body supposedly looking after consumers," St John's Buildings' Elis Gomer said.
A landmark Supreme Court case in 2014, known as Plevin, found that consumers who were sold PPI which had extortionate commissions included – which they were not aware of – could claim that this was mis-sold.
A follow-up to this case held that the consumer could reclaim the full cost of the commission. But the FCA has since recommended that banks only pay out the difference between the commission which was charged and 50 per cent of the premium. So if a customer was charged a 70 per cent commission, they would only get 20 per cent pack.
Gomer said it was questionable whether the FCA was being "consistent with its strategic objective to ‘secure an appropriate degree of protection for consumers’".
According to Gomer, banks are paying out the lowest sum possible under the FCA's rules – but there have been cases where savvy consumers have challenged this to claw back the full cost of the commission, and have had their case settled for higher amounts behind closed doors.