Happy New Year to you all. In typical British fashion, we entered 2008 with stories of trains not running on time, a strain of the winter vomiting virus sweeping across the country and of course the biting cold weather.
It felt rather peculiar on the first day of the year for the national papers not to lead with stories of the mortgage market, the highly misunderstood credit crisis or even a spatter of doom and gloom regarding the buy-to-let market. After all, these stories dominated the broadsheets and even the tabloids in the last two quarters of 2007. Perhaps we are heading towards a period of relative normality, as the mortgage market finds its feet and crosses its fingers for a less tumultuous year.
Let us go back briefly to last year. It closed with a shocking fine for Norwich Union Life to the tune of £1.26m. It was found to have put customers’ personal details at risk, and even on discovering instances of fraud in 2006, the firm took steps to inform and protect current and former directors of Norwich Union Life but did not take similar action to protect policyholders who were not directly connected with the business. Of the 74 policies that were surrendered, nine belonged to Aviva directors. The fee seemed fair with data fraud becoming one of the fastest growing crimes in the UK. Financial services companies quite rightly must understand and uphold their responsibilities to protect client data.
In a similar vein and in light of all the missing CDs from Government departments containing personal data, the Commons Justice Committee has demanded tougher laws so these departments can be held criminally responsible for data protection breaches. And quite right, too. The committee found there was a “widespread problem” and “systemic failings” in the Government’s handling of personal data. As well as new criminal laws, the committee wants stronger enforcement powers and better resources for the Information Commissioner.
For too long, the financial services industry has had to endure the mishaps of Government. There is no question that financial services companies must abide by the rules set out for them and pay for breaking those rules. However, it must be excruciating to watch Government U-turns on strategies (self-invested pension plans, home information packs), maladministration (final salary pension schemes) and data breaches (see above) and know these departments will come under no severe penalties, despite putting businesses and people’s personal finances at risk.
Back in the halls of Westminster, the Government was accused by a select committee of being a bit ‘yellow’ when it came to home information packs. The Department for Communities and Local Government was accused of failing to engage with stakeholders in the scheme effectively and early enough.
With this in mind, let us go forward into 2008 engaging in open dialogue with the Government. And finally, allow me to wish you all a very happy, healthy and prosperous New Year. n
