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Maybe it’s just me, but have you heard the word “fraud” used much lately? I didn’t think so. Neither have I. What ever happened to it?
The only thing I could think of is that it has become a so technically precise legal terminology that it is only used in legal charges, challenges, torts, and briefs. Then it dawned on me that it has simply become outdated and replaced by more politically correct terms like “misselling” and “manipulation”. I blame “the powers that be” for generating this fraud on average Ian Citizen in order to frame reality in the politest possible terms, thereby reducing the possibility of criminalizing businesses and their tactics so to the minimize public public discontent and prevent it from becoming public outrage.
Take the case of CPP Group (LSE:CPP). The insurance company announced that it had reached an agreement with the Financial Services Authority (FSA) to pay a total redress of £33.4 million for “misselling” its insurance products. It is the largest retail fine the FSA has ever levied and it will mean a rocky road ahead for CPP as its deal includes payments over a period of time.
Now, don’t get me wrong. CPP has conceded in the clearest possible, pentitent terms for “misselling” its products. Non-Executive Chairman Charles Gregson said, “The Board clearly recognises the seriousness of past failings identified by the FSA in its investigation of historic practices in the UK business, and is deeply sorry for any customer detriment that may have occurred. A great deal has been done to improve governance, compliance and risk management capabilities throughout the Group. The Board is pleased with the progress being made by the new executive leadership team on deploying the new, customer-led, strategy as we rebuild the business for the future.” They need to be lauded for that, if for nothing more than strength of character.
Insurance companies and banks have become the biggest “missellers” of all time. Odd, isn’t it, “misselling” sounds more like “mistake” than it does “thievery”, “deceit”, or “fraud”?
Kudos also today to the FSA for its warning/suggestion to UK bank that have been involved in “misselling” and “manipulation”. Andrew Bailey has written a letter to bank CEO’s “urging them” to consider cutting back on, or even eliminating, year-end bonuses in light of their fraudulent activities. It’s stretches the reaches of comprehension that Bailey would have to even suggest it, because that raises the concern that the bankers could not figure that one out on their own. But that would be too much to expect. I mean, we’ve got to give these guys a little bit of a break. Their big money-making schemes, aka “misselling”, have been exposed, so they need to figure out how to line their corporate and personal pockets by creating new schemes that will not appear to be “misselling”.
The Financial Times quoted a ‘senior banking sector advisor’ as saying that the bank executives have “realized they have a cultural problem and that (their) pay is a big part of it.” Let’s hope so. Discounting accumulated fines, the total reserves set aside by the banking sector alone just to compensate customers amounts to £10 billion.
Maybe it’s “misselling” to the authorities, but when its my money they are hoodwinking me out of, it is, in no uncertain terms, fraud. And I have had enough of it. Haven’t you?
You are absolutely right. These people are crooks, fraudsters and thieves. They must be locked up and for a long time (Sorry Mishoused or mislocated) Incidentally, have you noticed in the latest scam involving dodgy meat, already there is no fraud it is a case of “MISLABELING”