FSA dismisses FOS Concerns over Bank Mis-selling

Following up on the story about the FSA dithering on structured products and refusing the FOS to allow to investigate complaints.

More evidence emerges that the FSAs principal concern is not consumer protection but rather the protection of the Banks and institutions which it regulates. It has effectively dismissed concerns from FOS over a massive increase in complaints in banks actions in selling inappropriate products to the elderly.

A FOS spokeswoman says:

"Many of these consumers had only gone into the bank branch to make a withdrawal from a savings or deposit account but ended up being advised to take out an investment. It is particularly concerning that even when a consumer had explicitly referred to the fact that their main priority was to protect their capital rather than generate a return, they were still advised to invest in funds that put their capital at risk."

Why are the Banks so keen on selling financial products that risk investors capital to elderly customers. Does anyone actually believe for a moment that this is a sudden burst of of consumer care? No, it is because the commission on these Bonds can be as high as 6/7%.

Many elderly clients are deeply concerned and stressed about the poor return they are getting on their deposit funds and are vulnerable, and of course would never believe their Bank would sell them anything that was not right for them.
Of course the banks deny any problem despite the clear cases that have already been ruled on and despite the fact the FOS are openely expressing concerns.

The sheer arrogance of the Banks in the statement below just about sums it up -  over 1800 complaints (you can take a view on how many elderly victims will not know or or understand they can complain).  How many Bonds are been sold to investors over 70?

British Bankers' Association executive director Eric Leenders says that 1,809 complaints is "a relatively low number compared with the millions of bank customers of this age group who save".

If you have elderly relatives make sure they are at least aware of the situation. Anyone who has elderly relatives know that they often hate fuss are embarrassed by the fact they may have been persuaded to do making a bad decision and are very apprehensive about making a complaint.
There are links below to the report on FOS concerns and another to a report on the Daily Mail on Banks ignoring warnings and selling high risk investments when inappropriate.

Remember when you could not go into a Bank Branch without being jumped on by some bank employee lurking behind the potted plant wanting to talk about your Pension?  Yes?  Well we all know how that turned out.  

They have now turned their attention to your Mum, Dad and Grandparents  make sure they are aware!