FSA launches measures to reform PPI market and protect consumers
13 August 2010
New measures to protect consumers in the Payment Protection Insurance (PPI) market have been launched today by the Financial Services Authority (FSA).
The FSA has published a policy statement confirming its package of measures to protect consumers in the Payment Protection Insurance (PPI) market.
The package will ensure customers are treated more fairly when complaining about PPI and when buying the product.
The package will include new handbook guidance to ensure complaints are handled properly and fairly, and an explanation of when and why firms should analyse their past complaints to identify serious flaws in sales practices. An open letter outlining common sales failings will also be included in the measures to help firms identify bad practice.
The FSA states that firms must adopt the new measures by 1st December 2010, and expects them make preparations in the months beforehand such as training their staff to a higher level. The regulatory body says it will monitor firms closely to ensure the new standards are implemented.
Dan Waters, the FSA's director of conduct risk, said: "Today is the culmination of months of hard work and now, with these measures, we look forward to consumers being treated fairly whether they are buying or complaining about PPI.
"Now, with this package of measures we're confident we can mend a market that has been broken for too long.
"This remedy is fair to consumers and the industry alike. The onus is now on the industry to ensure it treats all customers fairly. We will be monitoring the implementation of our guidance closely to ensure real change is delivered."
The new measures are part of the FSA's commitment to reform the market. Since they took over the regulation of PPI they have visited over 200 firms and in 2009 they halted the selling of single premium PPI with unsecured personal loans.
The FSA has also taken action against 24 firms and individuals for PPI failings with fines totalling approximately £13 million.
The largest fine to be given so far in the retail sector is the £7 million fine against Alliance & Leicester in October 2008 for serious failings in its telephone PPI sales.