Many people look at January through fresh eyes, with a view to making a clean break with the past and making improvements for the future. Personally, I hope the FSA keeps right on track with the progress it was making as last year drew to a close.
The regulator is at last starting to show the payment protection insurance industry that its bite is every bit as bad as its bark. The latest firm to be fined is Redcats (Brands) Limited, which was hit for a total of 270 000 after failing to treat customers fairly when selling PPI.
There are a number of reasons why everyone in the insurance market should warmly welcome such action.
In the first instance, it is a clear statement of intent to protect consumers and ensure they are not getting a raw deal when it comes to buying insurance.
However, it is also hugely important for the industry as a whole that those outside the market selling insurance as secondary or tertiary products do not devalue the industry and damage the reputation of the market, where we operate as our primary concern.
It is unpalatable to think of people operating in other retail ventures hijacking the insurance market to swell their own immediate profits and through their own poor practice damage PPI’s reputation further.
Hopefully, the FSA will also show as much enthusiasm in looking at dealing with some of the major credit and PPI providers within the market during 2007 which are also perpetrating poor practices and procedures but have not been held to account in any meaningful way.
In the new year, the Office of Fair Trading is set to announce formally the referral of the PPI market to the Competition Commission and in time this should deliver further improve-ments to the structure of the market and the availability of insurance for consumers.
Those providing insurance should be fully aware of the responsibilities they bear and the FSA is so far doing a good job in bringing these responsibilities to the forefront of people’s commercial considerations.
Given that there are a number of other PPI cases in the pipeline, it seems certain that the regulator will continue forward as before and as it gathers and builds on the momentum created in 2006, I firmly believe that 2007 will begin to see PPI improve on its performance and see practitioners both in and outside the insurance market get their act together. Long may it continue.