But former executives criticise FSA
The former head of Lloyds’ retail division has apologised for the bank’s mis-selling of PPI.
Helen Weir, who was in charge of the retail division between 2008 and 2010 told the Parliamentary Commission on Banking Standards she regretted the breakdown in trust between consumers and banks and the damage the scandal had done to the relationship with the Financial Services Authority (FSA).
Ms Weir, now the finance director for John Lewis, said: “I acknowledge the mis-selling of PPI across the industry and at Lloyds and apologise wholeheartedly for my part in that.”
However, she added that she believed she and the bank had acted in good faith and believed PPI was a good product.
“What I am very clear about, both from research and from listening to customers is that this was a product that met very important financial needs for customers who wanted peace of mind were they to fall into difficulty.”
She was appearing before MPs along with other ex-Lloyds executives, including former chief risk officer Carol Sergeant, who appeared to place some of the blame with the FSA.
She told MPs the FSA had not raised any specific issues over PPI during its investigation of Lloyds between 2005 and 2008 and said: “We should have had more deep conversations with the FSA about how they would implement the principles in practice.”
But the panel’s lawyer QC Rory Phillips hit back at Lloyds’ defence of its actions, saying: “Surely it’s stretching incredulity to suggest to the commission that all of this problem is based on a genuine misunderstanding between the industry and the regulator.”
Lloyds increased its PPI provision by £1bn to £5.3bn towards the end of last year, with the total budget for the UK’s biggest banks expected to exceed £11bn.
The British Bankers Association (BBA) has asked the FSA to set a deadline of April 2014 for consumers to claim back mis-sold PPI but the financial regulator has so far resisted, saying it would consider the banks’ approach but would only agree if it is “in the interests of customers”.
More than 2.5m people have been paid compensation for mis-sold PPI. Consumer Finance Claims specialises in claims against financial institutions that have mis-sold PPI and have helped consumers win thousands of pounds in compensation.