* No let up in monthly compensation tally for PPI
* FCA also outlines concerns over mobile phone insurance
* FCA to levy hefty fines related to phone insurance
By Huw Jones
LONDON, June 27 Britain's banks have paid out
more than 10 billion pounds ($15.3 billion) for mis-selling loan
insurance, the Financial Conduct Authority said on Thursday, and
the bill is rising with no deadline set for claims.
Separately, the FCA said it will levy a hefty fine next
month on a firm for poor handling of complaints about insurance
it sold to cover the loss or theft of mobile phones.
The FCA - launched in April after the financial crisis
convinced legislators the Financial Services Authority was too
lenient a regulator and had to be scrapped - is mandated to
protect consumers and end years of mis-selling products.
It said banks have paid 10.1 billion pounds to customers hit
by the country's biggest financial mis-selling scandal.
Compensation is still being paid out at the rate of about 400
million pounds a month.
The Bank of England told five British banks last week to
increase their capital buffers by a collective 13 billion pounds
by December, partly because of the rising bill for mis-selling
payment protection insurance (PPI).
Banks have made PPI provisions of about 14 billion pounds
and had hoped that the FCA would set a deadline for claims, but
talks with the regulator broke down.
In a review of mobile phone insurance (MPI), the watchdog
said there is a gap between what the customer expects from a
policy and what it gets from a sector dominated by nine, unnamed
Some products were not designed to meet customers' needs,
terms and conditions were unclear and unfair, and claims were
poorly handled, the FCA said.
"Although the costs of MPI are relatively low, with premiums
for some policies as little as a few pounds a month, the product
is widely held with over 10 million customers," the FCA said.
One man lost his phone in the back of cab and made a claim
after being unable to recover it, but it was rejected on the
basis he'd left the phone unattended in a public place.
Another claimant was rejected because of "mis-use" of his
phone - it had not been used in the last two weeks.
"We have begun communicating the findings to the firms that
took part in the review and they are making improvements," FCA
director of supervision, Clive Adamson said.
The review is the latest example of how the regulator is
stepping in earlier and scrutinising the products themselves
more closely, compared with looking at sales practices in the
past long after evidence of mis-selling had emerged.