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FSA to implement single premium PPI ban by May

All firms selling singe premium payment protection insurance have until May to withdraw the product from the market, says the Financial Services Authority.

In a letter sent by the FSA to all firms selling single premium PPI with unsecured personal loans, the regulator has asked them to can the product “as soon as possible, and by no later than 29 May”.

The letter, sent from FSA managing director of retail markets Jon Pain, said: “We recognise the severity of the current economic climate and the financial problems many consumers are facing. Moreover, we believe that PPI can play an important and legitimate role to cover repayments on specific credit agreements for consumers facing job loss, or other issues at this difficult time. However, our focus remains on how this product has been, and continues to be, sold and whether consumers have been treated fairly during the sales process.

“We therefore request that if your firm has not already done so, it stops selling single premium PPI with unsecured personal loans.”

Pain says the request is justified to bring an “orderly withdrawal of single premium PPI from the market”.

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