FSA outlaws sales of single premium PPI from 29th May

by Gill Montia

Story link: FSA outlaws sales of single premium PPI from 29th May

The Financial Services Authority (FSA) has today written to lenders that are still selling single premium Payment Protection Insurance (PPI) with unsecured personal loans to ask them to withdraw the product as soon as possible, and by no later than 29th May.

Alliance & Leicester, Barclays, Co-Operative Bank, Lloyds Banking Group and RBS/Natwest opted out of the controversial market for single premium PPI at the end of January.

According to the regulator, some of these firms, along with other market players, now offer or plan to offer regular premium PPI instead of a single premium product.

The letter from Jon Pain, the FSA’s managing director of retail markets, recognises that PPI can play an “important and legitimate role to cover repayments … for consumers facing job loss, or other issues at this difficult time”.

However, the regulator says its focus remains on “how this product has been, and continues to be, sold and whether consumers have been treated fairly during the sales process”.

Firms have until 31st March to confirm in writing that they have complied with the request.