Did anyone watch Panorama last week? It was about bank charges and as well as highlighting Halifax’s 3650% pa overdraft fee it also covered the £2.6bn the banks make on penalty charges every year. It made some good TV but also some tough points about PPI claims and the shocking profit that the banks are making on interest rates.

Spealing to the Secretary of State for Business, Vince Cable, presenter Adam Shaw asked why the UK banking industry was so unfair, Mr Cable responded with an appreciation for the bank’s uncompetitve attitude, saying: “When we talk about restructuring the industry, we mean a more competitive system where consumers are not ripped off.”

The show also touched on emerging alterntives to the traditional banking houses, we’ve already spoken on the blog about Tesco and Virgin but the programme introduced us to Metro Bank, the first new high street bank for over 100 years. Metro’s approach is one that could prove very popular, putting aside jargan and zero competition and embracing customer service. This fresh approach goes as far as calling their branches ’stores’, opening at 8am, having glass-less counters, offering lollypops and even providing dog biscuits. With a current system that seems to be failing and with lending down by 10% over last year to 3.2bn, the lowest level in a decade, a new bank with new ideas could go a long way.

After mis-selling Mortgage Payment Protection Insurance (MPPI) left, right and centre, and causing countless PPI Claims, mortgage brokers are now increasingly reliant on the protection market to survive. Talk about full circle, protection products now account for around 40% of a typical adviser’s income and around 75% of all brokers say that PPI is “very important” to their business.

It’s easy to see why the poor old mortgage advisors have seen their paypacket hit, with figures showing mortgage related income falling to just 44% of their total average income. But they’re not down in the mouth, most advisors are looking forward to the job and welfare cuts and are predicting an increase in protection sales as a result.

Times are tough and any money saved is seen as a good thing by households up and down the country, so when it comes to insurance, it seems UK consumers are heading online to find the best deals. Accountancy firm Deloitte has conducted research into spending habits over the past 12 months and found that price comparison sites are increasingly being used for insurance product purchases.

It’s findings show that 34% of people with general insurance policies have switched provider in the past 12 months to get a better deal and a third of people said they were now more likely to use a price comparison website. Some encouraging news also came out of the research, according to the stats: fewer consumers are cancelling their insurance policies to avoid mis-sold PPI and save money. In last years survey, 11% of people said they were considering stopping their Payment Protection Insurance (PPI) to save money, but this has fallen to just 6% over the last 12 months. Good news, as long as the policy has been sold correctly.

As we now know, despite the high number of PPI claims being made, the Financial Services Authority (FSA) is to be replaced in 2012 by a number of independent bodies but that hasn’t stopped the financial watchdog handing out justice. As well as fining companies, the FSA also penalises individuals for financial infringements and the latest person to fall foul of the law is David Head, a director of Essex-based mortgage and insurance broker network, Compliance Services.

The company operated as a network and recruited mortgage and insurance brokers but came unstuck when Mr Head failed to put in place systems and controls to ensure the brokers acted correctly. He also failed to properly supervise insurance brokers linked to a firm previously disciplined by the FSA for Payment Protection Insurance failings and as a result was fined £10,500.

It’s monday, it’s July and it’s raining so one thing’s for sure: the English summer is here. Finance-wise, house prices are down*, the BoE base rate has remained at 0.5% and the Economy is up. So it’s a mixed bag of good and indifferent and still very much a situation to keep your eye on.

Closer to home, payment protection insurance claims continue to flood in to the Ombudsman but with unemployment still high (2.5 million at the last count) and May’s figures due for release this week, the number of people protecting themselves with good PPI is at an all time low. This of course can have some serious consequences, some of which are discussed in an article from today’s Telegraph…

The Financial Services Compensation Scheme (FSCS) is designed to compensate customers in the event of their financial service provider failing to deliver satisfactory goods. It is there for people who have been mis-sold PPI, who have lost out through no fault of their own or who have received poor service. The scheme is essentially a pot of money put together through a levy system.

The different financial institutions add a certain amount each year depending on what they provide; banking, insurance, intermediary services and the total is used to refund or compensate customers. With the massive increase in the number of PPI claims has had to come an adjustment in the amount levied and this increase has been big. There has been a 58% increase in PPI complaints over the past 12 months, with over 49,000 new PPI complaints received and 89% of them upheld. To cope with this amount of compensation, the FSCS has set a budget of £61m for the 2010-11 financial year which is nine times that of the previous year.

As the tough times continue and the Chancellor delivers more cuts to benefits and state support, you would think that more people would be considering some form of Payment Protection Insurance (PPI). The reality is far from this and sees many mortgage holders and borrowers cancelling PPI to save money due mis-sold PPI claims and unemployment.

Of course, in the same way people should be encouraged to save money for the future, they should also be encouraged to protect themselves financially in the present, but the possibility of rises in Insurance Premium Tax (IPT) seems to contradict this viewpoint. Should Mr Osborne increase IPT then the cost of insurance will go up and in these austire times, that can only lead to cancelled policies and a massive risk gap.

Get this: £4 billion of consumer money unfairly taken, 2 million Payment Protection Insurance (PPI) policies mis-sold, thousands of PPI claims, people have lost their homes and accumulated massive debts and yet the Financial Services Authority (FSA) won’t install qualification requirements for PPI sales people.

This news comes as the financial watchdog looks into the costs and benefits of requiring such qualifications for advisors of term assurance, critical illness cover (CIC) and income protection (IP). Why they aren’t including PPI is a mystery seeing as that’s the form of insurance that has been so grossly mis-sold. Maybe they’re relying on the new regulation stating lenders must wait seven days from a credit agreement to contact a customer about the insurance product. Or maybe they think the shift in public perception of the product is enough to protect future consumers, either way – we’d be a whole lot safer with qualified advisors on the end of the phone.