Insurance: Payment Protection Insurance

Lord Hughes of Woodside Excerpts

Monday 5th March 2012 Lords Chamber

[Lord McNally]

I was halfway to agreeing with the noble Lord because one of the first things I asked was: why is the Ministry of Justice regulating claims management companies? I was told—I am looking at the noble Lord, Lord Borrie, although I do not think he was in post at the time—that the Office of Fair Trading was reluctant to take on this responsibility. The noble Lord nods his head. I still wonder whether there would not be a better home for this matter, but while we have it, noble Lords should know that our motto is “We are from the Ministry of Justice; we are here to help”. We certainly intend to ensure that, while we have a responsibility to regulate this industry, we will regulate it with all due diligence.

[Lord Hughes of Woodside]

My Lords, is the Minister aware that there appears to be a scam on the go? I have had about 12 phone calls, in which I have always been addressed by name, saying that they will help me to get money back under the payment protection scheme. Is the Minister saying that this is a vicious and misleading practice by companies or that we are in danger of a scam? If so, should not the public be warned one way or another?

[Lord McNally]

I would take the name of the company and report it to the Ministry of Justice. Cold-calling in person is banned; high-pressure telephone calling is banned; and unsolicited text messaging is banned. I am sure that noble Lords to whom this has happened for the first time have already realised that this is an industry where a lot of consumers’ money is at stake because of the success in making the banks take responsibility for this mis-selling. As the noble Baroness said, there is something like £8 billion or £9 billion that could be returned to consumers and, to put it no higher, there are some very dodgy practices at work with people trying to get their hands on that money. I can assure noble Lords that the Ministry of Justice will accept its responsibility in this area. We are talking to the Financial Ombudsman Service as well and we shall pursue this matter in the best interests of consumers.