Consumers are treated unfairly according to the FSA
- 11TH JUNE 2007
The Financial Services Authority has deemed the payment protection insurance (PPI) offered by high street lenders and banks unfair to consumers. Extensive and ongoing investigations into the payment protection insurance market has revealed that consumers just do not understand what they are buying and are often pressured into purchasing a policy whether it would suit them or not.
Stuart King, the Financial Services Authority’s head of marketing intelligence and retail themes, has revealed that payment protection insurance has long been mis-sold to customers that cannot benefit from it and has vowed to commit to making improvements so that consumers were not treated in the same way in future.
Although payment protection insurance can provide excellent cover for a number of people if sold in a fair manner, consumer group Which? has criticised it for its extortionate pricing and the fact that very few individuals actually successfully claim on it.
Companies offering standalone policies, like independent payment protection provider British Insurance, have largely welcomed further Financial Services Authority investigations into the payment protection insurance market. Not only will recommendations emerging from the investigations make the treatment of consumers considerably fairer, they will also ensure that pricing structures point towards a better value product for those that can feasibly benefit and successfully claim.
