12 June 2014 by

Financial Conduct Authority Review Update

The FCA has made the following recent comments on the progress of the review:


In 2012, we identified failings in the way that some banks sold IRHPs. The banks involved agreed to review their sales of IRHPs made to unsophisticated customers since 2001. The full review started in May 2013.

The voluntary agreements establishing the IRHP scheme are supported by independent reviewers appointed under s.166 of the Financial Services and Markets Act 2000.  Every case is overseen and verified by an independent reviewer.

Customer engagement in the review has been high with 86% of eligible customers choosing to have their cases reviewed.  We would like to encourage the 600 customers yet to decide to do so as quickly as possible.

The review so far

All nine banks have now completed their sales reviews of customers who joined the review before March 2014.  AIB, Bank of Ireland, Co-op, HSBC, Lloyds, Santander, and Clydesdale and Yorkshire Banks have met our target by delivering redress letters to all but a handful of these customers by the end of May, within 12 months of starting their reviews. Barclays and RBS will send out redress letters to the remaining customers (around 500 customers between them relating to 700 sales) before the end of June.

The banks have now sent 15,000 redress determinations to customers, 13,000 of which include a cash redress offer and 2,000 confirm that the IRHP sale complied with our rules or that the customer suffered no loss.

To date, 7,000 customers have accepted a redress offer and £1.1 billion is being paid out.  In addition to the £1.1 billion of redress payable to customers, the banks have set aside money to cover the costs of having to get out of these products (the payments customers would have made in the future), the costs of employing more than 3,000 people to carry out the exercise, and the costs of engaging independent reviewers to look at every case.

The latest figures

Click below to see the number of sales at each stage of the review. In response to feedback from customers, we have included granular information about sophisticated customers, customers who have not opted in to the review, and about the types of alternative products that some customers are being offered as redress.”

Once again, the statistics have failed to address (i) the large number of people who have been offered inadequate cash sums as a result of alternative products, and (ii) consequential loss, which is becoming an albatross about the neck of the FCA. In these two issues the FCA’s Scheme has sacrificed fairness and justice for the sake of speed and given the enormous benefit that the banks are set to gain as a result, it seems that the FCA has enabled the banks to get away with it…again.  Is this the behaviour of a regulator that is fit for purpose?”

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