FSA Review PPI Practices

The Financial Services Authority has today published the outcome of its most recent study into payment protection insurance selling standards in the UK, which reflects a continuing problem core as regards fairness in selling practices.

The Financial Services Authority, responsible for regulating the financial industries within the UK, has previously outlined guideline selling practices for payment protection insurance, which have as of yet to be fully adopted across the board to satisfactory standards.

Whilst today’s report acknowledged some progress was being made as regards achieving required selling standards, it also highlights ‘extreme disappointment’ at some companies which have as of yet to meet the benchmark, many of which could now face stiff penalties if they don’t mend their ways.

Payment protection insurance covers borrowers in the event of inability to make repayments on a mortgage or loan as a result of illness or unemployment. Whilst many find it an invaluable lifeline for protecting secured assets and avoiding credit troubles, there has been identified a problem core of retailers that still fail to provide sufficiently clear cover to consumer buyers.

The report highlighted that many firms selling PPI had still not made any improvements in the clarity of information provided to customers as regards how much the policy costs, what it covers and whether the particular policy was suited to their needs.

The FSA has recommended that firms selling PPI cover take note of the finding of the report and ensure that they work within previously publicised guidelines in order to avoid the financial penalties associated with falling out of line with regulation.

The FSA has also announced that it will be increasing the level of fines levied against companies that fall foul of its regulations, declaring that firms have already been made well aware of their obligations to fairness and to their customers.

Category: Financial Services Authority News, Insurance News