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Which? says FSA is leaving public at risk over PPI

The FSA’s failure to name and shame the companies profiteering on payment protection insurance will result in consumers being put at risk for at least another year, warns Which?

Which? has called for quic- ker action after both the Off-ice of Fair Trading and the FSA released damning rep- orts into PPI last week claim- ing that consumers are being overcharged by up to £2bn a year.

The OFT is referring the industry to the Competition Commission but the FSA says that any clampdown on PPI sales practices will not come into force until the fourth quarter 2007.

Which? Personal finance campaigner Pula Houghton says: “It is very disappointing that the FSA has not named and shamed the companies who exhibit bad practice.

“Consumers will be left with no idea which companies are not complying with reg-ulation, which will leave them vulnerable.”

The OFT probe, requested by Citizen’s Advice, found the product is not delivering choice or value to consumers and providers are consist- ently failing to treat consumers fairly. Bank and building societies routinely give the impression that the loan will not be granted without it and fail to check whether the policy is suitable. The OFT also voiced concerns that consumers do not shop around for the product.

OFT chief executive John Fingleton says: “PPI can provide worthwhile cover for some consumers.

“However, evidence sugg-ests that how consumers purchase their PPI, their understanding of the product and the quality of information available to them hinders competition.”

FSA managing director of retail markets Clive Briault says: “Despite some improvements in standards, major weaknesses remain which go to the heart of the culture surrounding PPI sales.”

Liberal Democrat Shadow Chancellor Vince Cable says: “The principle of PPI is a good one but it has been turned into a cash cow by greedy banks.”

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