How many times can the FSA listen to such demands and simply carry on as before? Consumers are losing out because the FSA has shown itself incapable and unwilling of acting decisively in this market.
Braintree, Essex (PRWEB) October 1, 2008
If the Financial Services Authority (FSA) is incapable of creating a fair, transparent and effective payment protection insurance (PPI) market, then those responsible for the failure should be put out to pasture.
Again, consumer watchdog Which? has been forced into demanding action is taken over the shockingly poor performance of firms in the PPI market. However despite the litany of criticism that has rained down on the market, the regulator has done little to root out poor practice and deter future failures.
Sara-Ann Burgess, director of PPI specialist Burgesses, believes many of the failures of this market stem from the regulator's unwillingness to take decisive action.
"It is time the FSA stopped barking and started biting. There have been numerous reports into this market, which have highlighted the areas that need to be improved. If firms selling PPI do not come up to scratch then they should now expect to lose their authority to trade in this area."
Burgess accepted that some firms had been fined, but said the level they had been fined at was not sufficient to clean up the market or the sanctions numerous enough to make others believe they would be caught.
"There has to come a time when we stop slapping the market on the back of the hand and take it firmly by the scruff of the neck. The FSA's approach of trying to cajole firms into compliance has spectacularly failed and it is the thousands of consumers who have been mis-sold policies that lose out."
Burgess said Which? was right to call for firms found wanting to review their entire book of business and for better information to be available to consumers. However she added: "How many times can the FSA listen to such demands and simply carry on as before? Consumers are losing out because the FSA has shown itself incapable and unwilling of acting decisively in this market."
When providers such as British Insurance can sell policies, which are more flexible and have better benefits for half the price of those still being sold by high street providers, Burgess said the regulator needed to take stock of the situation.
"There is a huge discrepancy between the best and the worst PPI sellers in this market and we need to close the gap and make sure consumers get the insurance they need. The FSA could regulate the products sold, take a much harder line on those found wanting, or stop credit providers selling only their own protection insurance. It has been offered numerous options but has refused to really put its weight behind any of them."
The longer the regulator allows the problems in the PPI market to continue, the more consumers will be negatively affected and the more difficult it will become to really deal with them.
"The FSA needs to find the appetite for this work and quickly," said Burgess. "If the people overseeing the protection market are incapable of doing it properly, then it is time for them to move on. Those firms doing a good job in the market are being let down by the regulator, while consumers continue to get a raw deal because the FSA will not come down as hard as it could and should in this area."