Rife, unfair treatment of customers and stifling competition issues were formally highlighted as debilitating problems in the payment protection insurance (PPI) market. The market sector looks set to be referred to the Competition Commission for further scrutiny.In the last year, the PPI market has barely been out of the headlines and the release of these formal findings from investigations undertaken by the Office of Fair Trading (OFT) and the FSA will put the market in the spotlight for many more months to come. There can now be no doubt that large-scale changes in PPI design, sale and claims processes are needed. Until these are introduced, the market must expect to remain under the microscope. The worry, however, is that, despite all the attention, little will actually be done and millions of policyholders will continue to get what is, in some instances, a very raw deal indeed. Following research carried out by the FSA last year, it raised a number of concerns which it had with PPI providers and distributors, and also laid down an ultimatum for the market. It must either introduce voluntary changes or see the regulator take unilateral corrective action. At the time all this was welcome comment and yet so far nothing has been done – except that the FSA has continued its investigation into the market and again formally stated its disquiet with the status quo. Perhaps the most worrying aspect is that things have fallen to such a level that the FSA has seen fit to issue “top tips” to consumers to help them avoid some of the worst practices in the market. It almost feels as if the FSA is putting the onus in this market on consumers to protect themselves, rather than ensuring protections are in place through the rules that providers and distributors are forced to follow, as happens in other markets. Despite frankly stating the rooted nature of the problem, FSA managing director of retail markets Clive Briault said consumers must be prepared to help themselves. There is no doubt that this is the case but it must be done in conjunction with back-up from the regulator, which should act quickly to stamp out the worst practices where they appear. In describing some of the problems faced in the PPI market, Briault pointed out that despite some improvements in standards, major weaknesses remain which go to the heart of the culture surrounding PPI sales. What the market needs is decisive action. Unfortunately this is unlikely to come in the near future from the FSA. Briault said that further work would continue around the PPI market but that any changes would not come into effect for at least a year. Detailing a timetable for further action, he said: “The FSA is considering, as part of the existing wider review of the effectiveness of the regulatory regime for general insurance products, whether new rules are needed in the area of PPI sales. It plans to publish a report on this wider review in Q1 2007, with any resulting changes coming into effect in Q4 2007.” If new rules are brought to bear in the fourth quarter of next year, then it will be fully two years after the Canary Wharf watchdog highlighted the major problems present in the market and many more policyholders will already have fallen foul of poor products in the interim. Sadly, due process can be a slow process. Akin to the problems raised by the FSA, the significant concerns that the OFT has raised will take time to filter through to a meaningful overhaul of the PPI market. The initial findings of the OFT’s interim report into the PPI market were released at the beginning of August and are available at www.oft.gov.uk/ Business/ Market+studies/payment. htm#ppi. The OFT has now considered the report and indicated its intention to refer the PPI market to the Competition Commission. What is under no doubt is the depth of the problem that the OFT believes exists following its statement. OFT chief executive John Fingleton said: “Following the work we have undertaken, it is clear that many consumers are failed by PPI – insurance which gives them a poor deal and often less protection than they think. There is limited evidence that the industry is taking steps to improve the situation but we believe they will not make major improvements to competition in the market. “Given our evidence and the scale of this market, our provisional view is that it would be appropriate for the Competition Commission to investigate further.” Most depressingly, despite the numerous opportunities that have been offered to the PPI market, it has failed to take action and set its house in order. Had this been the case, then the market might have been able to turn much of the negative attention it’s received into more welcome and positive coverage. Now that a wind of change is truly beginning to blow in the PPI market, the only hope is that it really takes hold and forces through changes which address the existing problems and deliver some effective solutions. Also, that they are brought to bear as quickly as the sometimes lethargic pace of due process will allow. The sooner changes are made, the sooner better protection will be afforded to consumers of PPI policies and the sooner they will have access to products which actually work for – and not against – them.