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PPI horror stories could scare off public

Paul Bradshaw has warned that the protection industry could suffer damage to its reputation because of horror stories over payment protection insurance.

He said PPI firms that disregard treating customers fairly could have a damaging effect on the rest of the market and lead to consumer mistrust.

Bradshaw believes regulation of the protection market has been subtle compared with the aggression shown in the life and pension industry and he attributes this the FSA’s recognition of flaws in theoretically correct but practically impossible detailed regulation.

But he said tougher product regulation might be necessary to rid the industry of dangerous products such as PPI.

He said: “I wonder whether some form of deeper product regulation is appropriate. It is a source of great sadness to me that the practical impact of regulation over the last 20 years has been to remove caveat emptor from the informed middle classes while leaving less advantaged sections of our community exposed to every debt and insurance rip-off such as PPI.

“Perhaps so long as we tolerate blatant disregard for meaningful TCF, we are doomed to be mistrusted by consumers and politicians. If a consumer reads in the Daily Mail that PPI is a rip-off, they are likely to conclude that term is too.”

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