The FSA has announced four Payment Protection Insurance firms will be subject to further investigatoin and a further 20 cases may also be investigated as a result of its latest PPI selling standards review.
The latest review looked at 150 firms, including mystery shopping of personal loan providers. The mystery shopping identified serious failures in the sales processes of a number of firms selling single-premium PPI alongside unsecured personal loans.
In addition, the following action has already been taken as a result of the FSA visits: Eleven firms have stopped selling PPI either permanently or temporarily until such time as they get their sales processes in order and/or retrain staff; three firms have cancelled their FSA authorisation to sell PPI; and four large firms are reviewing past PPI sales to ensure they were appropriate.
FSA managing director of retail markets Clive Briault says: “We have, on a number of occasions, set out clearly our requirements for the selling of PPI. While some progress has been made by the industry, we are extremely disappointed that some firms have still made little progress in improving their sales practices.
“The right PPI can provide valuable protection for consumers, but they are entitled to expect that they will be treated fairly by firms when they buy it. They must be told how this product works, what it covers, and how much it costs. At the moment, too many firms are not meeting these requirements.
“We will now strengthen our action against firms who fail to treat customers fairly when selling PPI.”
Whilst improvements were found in two areas with the vast majority of firms now making it clear to customers that PPI is optional; and firms are now offering cancellation refunds on virtually all single premium PPI policies.
However, little or no progress has been made in the other three areas: many firms are still not giving customers clear information about the product and what it will cost; not telling them the extent to which they are eligible for PPI cover and what they are covered for; and not telling them why, where advice is given, the recommended PPI policy meets their demands and needs.