Speaking at a select committee hearing on Monday, the Labour MP for West Dunbartonshire said he had declined PPI when he took out a personal loan several years ago and told his bank that it was not suitable for him.
McFall said his bank went on to send him eight letters trying to persuade him to change his mind.
He said his bank’s behaviour was “not far from harassment”.
FSA director of retail policy Dan Waters said that kind of behaviour was “not untypical” of its time.
He said there had been improvements in some aspects of PPI sales but not others and the FSA still has concerns.
But he said: “A number of firms have voluntarily agreed to stop selling single premium PPI and I think it is fair to say the handwriting is on the wall.”