Nationwide has temporarily withdrawn its loan and credit card payment protection insurance after admitting its salesforce was not advising customers adequately.
The mutual says it is retraining its 2,800-strong salesforce after its own mystery shopping exercises found its PPI sales processes were unsatisfactory.
The products will be reintroduced when Nationwide is satisfied employees are following the correct procedures.
The move comes ahead of the FSA publishing the third stage of its two-year investigation into PPI next month.
Loans.co.uk was fined £455,000 last October and Capital One was fined £175,000 in February for failing to treat customers fairly when selling PPI.
Nationwide spokeswoman Rosemary Calendar says: “The FSA has not asked us to withdraw these products. We do reviews fairly regularly and this issue has been highlighted.”
British Insurance managing director Simon Burgess says: “This is a drastic move by Nationwide.”
The regulator declined to comment.