The Financial Ombudsman Service has warned firms to “learn lessons” from payment protection insurance misselling after seeing a rise in complaints for new PPI-style protection products.
In its monthly ombudsman newsletter, published today, the FOS says firms are selling products that are difficult to distinguish from PPI, leaving customers confused.
It states: “Over the last couple of years, we have seen more cases involving different ‘payment protection products’.
“Although we haven’t seen the widespread problems we have seen with PPI, we have received a number of complaints about these products that have raised similar issues – for example, whether a business provided advice about the product with reasonable care and skill, or whether it gave the consumer information in a way that was clear and not misleading.”
FOS says the volume of complaints about non-PPI products is very small compared to PPI, but firms should be careful.
It states: “In the cases consumers refer to us, we expect financial businesses to have shown that they have learned the lessons of PPI in the way they marketed and sold these products and, of course, in the way they handled complaints if something had gone wrong.”
The FSA and Office of Fair Trading recently published joint guidance for businesses for selling new payment protection products.
FOS also hits out at claims management companies for failing to identify the right products and causing “unnecessary confusion, delay and frustration” on all sides.