Fresh consultation sparked by rise in costs and number of complaints
The FSA has announced a fresh round of consultation on its plans to reform the Payment Protection Insurance (PPI) market.
Following earlier consultation on its original PPI reform package, the FSA said predicted costs of dealing with the fall-out from the misselling of such policies has risen.
In addition, the estimated number of complaints has risen from 158,000 to 450,000.
The FSA has announced a further six week consultation on its revised measures in order to test the revised financial assumptions, which underpin the altered package, with firms.
Dan Waters, the FSA’s director of conduct risk, said: “We’re disappointed that the industry has responded so critically to our proposals but we remain 100% committed to bringing about genuine, lasting change in the PPI market. We do, however, recognise the importance in ensuring that genuine concerns have been listened to.
“Our commitment, nevertheless, is evidenced by the fact that we have halted single premium PPI sales, taken enforcement action against 23 firms, issued two ‘Dear CEO’ letters, undertaken three thematic reviews, conducted numerous mystery shops, and visited over 200 PPI providers. We remain firmly of the view that the PPI market is broken and needs to be fixed.”
Responses to the consultation must be received by 22 April.