The banks have been setting aside hundreds of millions of pounds after regulators found they had been widely mis-selling complex interest rate-hedging products to small businesses.
However, at a meeting earlier this week with chief of the Financial Conduct Authority (FCA) Martin Wheatley, Dr Cable said that the banks should be handling the claims faster.
The FCA has agreed on a new monitoring procedure, which is aimed at making sure lenders are held to account, and will publish regular updates on the pace of applications in order to make sure progress is monitored correctly.
The compensation scheme was originally devised by the Financial Services Authority, which was replaced by the FCA, along with the Prudential Regulation Authority, at the beginning of April, bringing to an end the ‘light touch’ regulation system.
Meanwhile, the number of PPI complaints continues to soar according to the Financial Ombudsman Service, which revealed last week that the number of new cases in the first quarter of this year outstripped the total for the whole of 2010/11.
The service also says it received 132,152 new complaints in the three months from April to June and warned that the “atmosphere of universal suspicion and distrust” over the banks’ response to compensation claims could slow down its work.
It added that the proportion of complaints it upheld in favour of customers varied widely from subject to subject, from just 1 per cent for cases involving state earnings-related second pensions to 78 per cent for PPI cases.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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