Complaints about Default Charges Soar

The BBC reports that complaints concerning bank default charges are soaring, with over 1,000 people calling the Financial Services Ombudsman on this issue every day.

The Ombudsman is taking on about 150 penalty charge cases a week, but the number of phone calls it receives from consumers looking to find out how to get penalty charges refunded is far greater. On Wednesday, following coverage of the issue by BBC's Wathchdog programme, over 3,000 calls were made to the Ombudsman.

The level of complaints being made is being compared to the endowment mis-selling scandal and is now the single biggest area of consumer complaints.

"Previously the largest number of complaints we received related to endowments," a spokeswoman said.

"However, we are getting at least three penalty charge calls for each one about endowments at present."

Unlike the endowment mis-selling scandal, however, the regulators and Government continue to fail to force the industry to take pro-active steps to provide consumers with redress, leaving all of the onus for action on the individual. Perhaps that is the greatest scandal of all...

Capital One fined for PPI Mis-selling

Capital One Bank has become the latest lender to be fined by the FSA for failing to protect consumers against the risk of being mis-sold insurance policies.

The credit card firm was found to have neglected to ensure that 50,000 customers received important information about Payment Protection Insurance and has been fined £175,000 - although none of the fine will find its way back to borrowers.

The FSA found that Capital One had inadequate systems and controls for selling PPI insurance and thus failed to treat its customers fairly. During 2005, Capital One sold approximately 335,000 PPI policies on UK credit cards.

Margaret Cole, director of enforcement at the GFSA, said: "We are determined to see much better practice in PPI.

"It is unacceptable for people to be put at risk of buying unsuitable protection insurance through not being given the right information at the right time."