FSA Figures Reveal Huge Surge in Bank Complaints
Europe, Middle East and Africa

The Guardian reports that according to the Financial Services Authority (FSA), Barclays was the bank with the greatest number of complaints in the second half of 2011. Reportedly, the 281,000 complaints made by Barclays customers was an increase of 30,000 from the first half of the year. However, Barclays chief executive of retail and business and banking  Antony Jenkins opined that the bank is moving in the right direction after reducing complaints by 30 per cent from 2010 to 2011. According to The Guardian, other banks experienced similar surges in complaints, with Lloyds TSB receiving 241,000 complaints (up from 182,000 in the first half of the year) and MBNA receiving 121,000 complaints (up from 71,000 in the first half of 2011). MBNA reportedly attributed the rise in consumer dissatisfaction to payment protection insurance (PPI), stating that “[t]he primary driver is PPI and we find that that is being inflated by aggressive claims management companies”. The Guardian also reports that “[t]he overall figures show that complaints about “advising, selling and arranging” increased by 69 [per cent] to 1,093,684, with 92 [per cent] of these about general insurance and pure protection products”.
The Guardian: Barclays tops FSA complaints list (28 March 2012)
(Source: The Guardian)

Censure Issued Against Bank
Europe, Middle East and Africa

The UK Financial Services Authority (FSA) has published a final notice (9 March 2012) in respect of Bank of Scotland (BoS), concluding that the firm was guilty of “very serious misconduct, which contributed to the circumstances that led to the UK government having to inject taxpayer funding” into its parent company HBOS Group. According to the FSA, the bank breached Principle 3 of the FSA’s Principles for Businesses, which states that “[a] firm must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems”. In light of the taxpayer funds that have already been spent to rescue BoS, the FSA has decided against imposing a penalty on the bank, as levying a fine would mean taxpayers would effectively pay twice for the same actions committed by the bank. Instead, the FSA has issued a public censure against the bank.
FSA’s media release (9 March 2012)
(Source: FSA)

Regulator Finds Marketing Licence Breach
Europe, Middle East and Africa

The UK Office of Gas and Electricity Markets (Ofgem) has announced that EDF Energy has agreed to pay £4.5 million to affected consumers, following an Ofgem investigation which found that the energy supplier breached its marketing licence conditions. According to Ofgem, the company has also accepted that its sales processes did not meet the regulator’s marketing rules, introduced in 2009, and had this not been the case, EDF would have faced a higher penalty. The investigation revealed that the processes and controls used by EDF “to ensure compliance with the rules governing clarity and accuracy of sales information” were not up to standard.
Ofgem’s media release (9 March 2012)
(Source: Ofgem)

Draft Whistleblowing Provisions for Ireland Announced
Europe, Middle East and Africa

Irish Reform Minister Brendan Howlin has released the Draft Heads of the Protected Disclosure in the Public Interest Bill 2012, as part of the Government’s commitment to “legislate to protect [w]histleblowers who speak out against wrongdoing, or cover-ups, whether in public or the private sector”, including “criminal misconduct, corruption, the breach of a legal obligation, risk to health and safety, damage to the environment or gross mismanagement in the public service”. The proposals provide for a single framework for the safeguarding of whistleblowers, and a key element of the draft legislation is that “it treats all parties equally and fairly”.

The draft proposals provide for, amongst other things:

  • a “stepped disclosure regime” in which a number of distinct “disclosure channels”, including internal, regulatory and external channels, are available to workers;
  • the protection of whistleblowers who have made a protected disclosure “from being subject to occupational detriment [and] also providing immunity against civil liability and criminal liability in certain circumstances”; and
  • certain remedies to workers who suffer from retaliatory conduct as a result of having made a protected disclosure.

As well, the proposals “[highlight] the responsibility of employers to put effective internal mechanisms in place to investigate whistleblowing complaints” and “maintain an organisational culture that supports whistleblowing”.
Irish Reform Minister’s media release (24 February 2012)

Related media and news items:
Transparency International Ireland’s (TI Ireland) media release (27 February 2012)
Irish Times: Whistleblower proposals published (27 February 2012)
(Source: Irish Reform Minister; TI Ireland; Irish Times)

Outgoing Chief to Get Almost £1.7 Million
Europe, Middle East and Africa

The Guardian reports that Misys chief executive Mike Lawrie could receive a £1.7 million payoff package when he leaves the company in March 2012. Reportedly, Mr Lawrie faced criticism last year for receiving a £2 million bonus. According to the Guardian, following the proposed merger of Mysis and Temenos, Temenos chief executive Guy Dubois will head the enlarged group, with the result that Mr Lawrie will leave his position as Mysis chief executive. Mysis’s annual report reportedly states that “[i]n the event of a change of control, if the contract is terminated either directly or indirectly as a result within the following 12-month period, [Mr Lawrie] will be entitled to receive a sum equal to 12 months’ salary, on-target bonus, pension contribution and health insurance”, which means that Mr Lawrie, an American citizen, could receive up to US$1.1 million in salary, a US$1.3 million bonus, and about US$280,000 in benefits and pension contributions. The bonus received by Mr Lawrie in 2011 was deemed by the shareholder advisory group Pirc as “wholly excessive”, reports the Guardian.
Guardian: Misys chief executive could be in line for £1.7m payoff (8 February 2012)
(Source: Guardian)