Online Providers Mis-Selling PPI Warns British Insurance

Companies selling Payment Protection Insurance over the internet are ignoring the Financial Services Authority's new guidelines on Treating Customers Fairly says Simon Burgess from independent provider British Insurance.

Braintree, Essex (PRWEB) July 9, 2008 -- Companies selling Payment Protection Insurance over the internet are ignoring the Financial Services Authority's new guidelines on Treating Customers Fairly says Simon Burgess from independent provider British Insurance.

Simon Burgess, MD British Insurance

It's not difficult - firms only need produce a simple eligibility document that advises potential purchasers of their suitability for the product and then asks customers to tick a box stating they have read the eligibility listing and understood it before buying PPI. People should not be allowed to buy PPI unless they've gone through this process.

I doubt providers are following these guidelines either

Yet again, the majority of PPI providers are flouting FSA rules and as a result, opening the floodgates for more compensation claims, increasing the number of complaints to the Financial Ombudsman Service and further damaging the reputation of the more ethical providers in this sector.

Their actions have already dented consumer confidence and this latest display of arrogance will only serve to further push potential purchasers away from obtaining cover and leave them without a financial safety net should accident, sickness or unemployment occur. I sincerely hope the FSA clamps down on these online rogues very soon.

In a bid to combat the widespread mis-selling of PPI, the FSA revised its Insurance Conduct of Business (ICOB) rules in January this year and introduced a new requirement asking firms to take reasonable steps to ensure customers are eligible to claim under the terms of the protection offered.

As well as scrutinising customers' eligibility prior to the product sale, providers were asked to advise purchasers if they were unable to claim under one or more elements of the policy.

The FSA set a deadline of 6 July to comply, but according to Burgess, the 12 sites he randomly checked ignored this ruling. He comments: "None of the sites I viewed have amended their sales process to meet the FSA's latest rule change.

"It's not difficult - firms only need produce a simple eligibility document that advises potential purchasers of their suitability for the product and then asks customers to tick a box stating they have read the eligibility listing and understood it before buying PPI. People should not be allowed to buy PPI unless they've gone through this process."

The FSA also requested providers remind customers of their right to cancel within 30 days (increased from 14) and disclose the total price of cover plus interest on a single premium policy. "I doubt providers are following these guidelines either," continues Burgess.

"Yet again, the majority of PPI providers are flouting FSA rules and as a result, opening the floodgates for more compensation claims, increasing the number of complaints to the Financial Ombudsman Service and further damaging the reputation of the more ethical providers in this sector."

He concludes: "Their actions have already dented consumer confidence and this latest display of arrogance will only serve to further push potential purchasers away from obtaining cover and leave them without a financial safety net should accident, sickness or unemployment occur. I sincerely hope the FSA clamps down on these online rogues very soon."

Further information on payment protection insurance can be found at www.britishinsurance.com

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