Simon Burgess calls for better FSA action
- 26TH JUNE 2007
Although the war against unfair payment protection insurance is still ongoing, consumers are beginning to win a number of little battles that will ultimately ensure that any payment protection insurance offered represents value for money in the future.
The Financial Services Authority has actually pressured lenders into rescinding their nil refund clause and banning it from policies in the future. This means that any individual cancelling a payment protection insurance policy will now receive a fair refund from the high street lender or bank that the policy was originally with.
The nil refund clause had been hotly debated behind the scenes for months. A change in circumstance or redemption of a loan would render payment protection insurance useless and unnecessary, but the consumer would not get a refund of any payment protection insurance premiums added to the loan in advance. This new ruling has meant that this is no longer the case and individuals can claim their redundant premiums back.
However, not everyone is happy with this decision. Simon Burgess, Managing Director of independent payment protection provider British Insurance, believes that the ruling does not go far enough to ensure fairness for consumers recently saying in a press statement that: “The FSA have not stipulated that the refund must be made on a pro-rata basis. This means that in effect, a provider could make a refund of just 1% of the pro-rata amount due, then pocket the other 99%”.
Maybe the Financial Services Authority will start listening to voiced concern because the consumer is still not being treated fairly enough.
