Standards still face improvement says FSA
- 21ST MAY 2007
While there has been “a bit of” an improvement in the way payment protection insurance (PPI) is sold, there still needs to be some further advancements made in the industry according to the Financial Services Authority.
The FSA has been running its own investigation into the sector and is currently into its third stage. Already some well known companies - such as Capital One bank - have been found to have mis-sold policies and have faced fines.
Following the first two stages of the investigation Robin Gordon Walker from the FSA said in a press statement that “We are looking to see an improvement on what we have found during the first two phases”.
In response to this Malcolm Tarling from the Association of British Insurers said that companies who sell payment protection insurance should make sure they do all they can to ensure that the consumer understands the product. Payment protection insurance isn’t suitable for everyone.
Industry expert Simon Burgess from standalone provider British Insurance agreed and added that too many companies are selling policies that are simply not suitable for their customer.
“Many times this means that they are unable to make a claim should they need to do so, making the policy not worth the paper it is written on. Along with this banks are charging ridiculous amounts for the premiums in order to make a huge profit and are doing nothing more than ripping-off consumers”.
It is anticipated that the FSA’s third phase of their investigation - which includes a mystery shop of around 200 providers of payment protection insurance - should end in June.
