According to the Public Accounts Committee (PAC) The failure of the regulation and redress system in the UK had resulted into the PPI claims scandal. It had allowed unscrupulous scammers to make money from individuals who deserved their refund.
MPs warned the new pension freedoms, introduced in April 2015, could spark a new wave of PPI-style mis-selling across all sectors.
Due to the failure of banks and the City watchdog to anticipate such undesirable parties able to conveniently scam consumers from their refunds, many may fall victim to the next scandal.
Which? and MoneySavingExpert.com criticised banks and the Financial Conduct Authority for failing to anticipate the possible scenario of unscrupulous groups taking advantage of uninformed individuals simply because banks couldn’t make it convenient to know whether a customer was mis-sold PPI and the FCA is pushing consumers to claim but did not push to make the PPI claims process simpler for consumers.
The PAC urged the FCA and the UK Treasury to identify how to contain widespread mis-selling and possible prevention methods to immediately stop it.
According to the PAC, departments and regulators have been “too passive” in allowing compensation that mis-selling victims could have received instead of scammers.