LONDON (Reuters) - Four British consumer and business bodies have taken legal steps that could compel the regulator to take swift action to end scams after years of financial product mis-selling.
In a bid to end the litany of mis-selling which stretches back to the 1980s with pensions and home loans, Britain’s finance ministry said on Wednesday that four bodies have applied for “super complainant” status.
This means that if they collate enough documented evidence that consumers of financial services are being ripped off, the Financial Conduct Authority (FCA) regulator must say within 90 days what action, if any, it will take.
Banks have paid over 10 billion pounds in compensation so far for selling unsuitable loan insurance, a mounting bill that forced Barclays on Tuesday to announce plans to replenish its capital buffer.
One of the applicants for super complainant status, the Federation of Small Businesses, is representing companies who believe they were mis-sold interest rate protection by banks.
The FCA replaced the Financial Services Authority in April, which was scrapped partly because of mis-selling scandals. The FCA has a remit to protect consumers with its powers to ban products.
“By giving certain consumer and business groups the ability to make ‘super-complaints’ to the new regulator, the Financial Conduct Authority, we can all help to tackle bad practice more rapidly and robustly than before,” UK financial services minister Greg Clark said in a statement.
The other three bodies are the Citizens Advice Bureau, consumers association Which?, and Consumer Council Northern Ireland. Others are expected and a decision on who will be granted super complainant status will be taken later this year.
Britain passed a law in 2012 making it possible for consumer bodies to become super complainants and called in March for applicants.
($1 = 0.6553 British pounds)
Reporting by Huw Jones; Editing by Elaine Hardcastle