Tackling poor PPI sales practices remains a high priority for the FSA. We will intervene to ensure consumers are protected and are considering what regulatory powers are the most appropriate to deliver fair outcomes. Firms may wish to consider stopping selling single premium PPI sold alongside unsecured personal loans, given the continuing problems in the sales of this product.
Braintree, Essex (PRWEB) October 14, 2008
The news that the Financial Services Authority (FSA) is to take a tougher line on those falling short of its standards in the payment protection insurance market is very welcome indeed.
However, according to Sara-Ann Burgess, director at PPI specialist Burgesses, it is disappointing to see the regulator does not have an agreed course of action ready to take against those found wanting.
She said: "General insurance regulation has been in place for almost four years and has had more than enough time to bed down. Firms have been given the opportunity to get used to the rules and adopt them into their processes. Where businesses are found not to be acting compliantly, I don't understand why the regulator cannot act swiftly and effectively to deal with them."
Announcing a firmer line was to be taken in the PPI market Jon Pain, Managing Director of the FSA's Retail Markets, had said: "Tackling poor PPI sales practices remains a high priority for the FSA. We will intervene to ensure consumers are protected and are considering what regulatory powers are the most appropriate to deliver fair outcomes. Firms may wish to consider stopping selling single premium PPI sold alongside unsecured personal loans, given the continuing problems in the sales of this product."
However Burgess questioned why the FSA was still considering which regulatory powers it should be using and urged it to take action as a matter or priority.
She said: "The FSA has been aware of problems in this market for years now and each and every review it has carried out has highlighted issues that need to be dealt with. The regulator has tried to get the market to take responsibility for its own actions and get firms to improve their own practices. Unfortunately it has not worked in many instances. The time has now come to act and to show firms that refusing to act compliantly will cost them their license to trade."
According to Burgess, there will come a point when the FSA is accused of giving too much leeway to those under its watch and she said this was a very real fear in the PPI market where consumers had already lost a lot of faith in the products being sold.
At a time when PPI had a more important role than ever to play for consumers, Burgess said it was time to weed out firms that were not putting consumers' needs at the centre of their thinking.
"There are firms like British Insurance providing low cost, flexible and effective policies in this market. Unfortunately too many firms that refuse to operate in this way are being allowed to hold back the market and put customers at risk of buying over priced insurance that they are not even eligible to claim on. Hopefully the FSA will soon put its powers to good use and rid the market of them."