Mis-sold Mortgage Claims > Mortgage News
FSA Boss States that Free Products Drove Mis Selling
Tue, 29 Nov 2011
The illusion of free accounts is what drove mis-sold products, according to Andrew Bailey, banking director at the Financial Services Authority .

The UKs trust in its own banks has declined considerably due to many mis-sold mortgages, mis-sold Payment Protection Insurance deals, mis-sold investment funds and additional bank charges for enabling individuals to access unauthorised overdrafts.

The illusion of free banking has caused a lot of the mis-selling, according to Mr Bailey.

At a recent conference he emphasised how loss-leading mortgages were sold whilst the property market was booming prior to the credit crunch and how they were subsidised by PPI sales.

Mr Bailey stated: ‘In certain activities there was arguably suicidal competition in the run-up to the crisis, of a sort that we do not want to see repeated. The most obvious case of this was mortgages, where margins on lending were squeezed heavily in the decade running up to the crisis.'

He added that, ‘The business model of squeezed lending margins and mis-sold products, whether it be payment protection insurance (PPI) or mortgage products, was wholly undesirable.’
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