Opposition MPs have launched an attack on payment protection insurance (PPI) after latest figures showed complaints to the financial services ombudsman have risen by more than 60 per cent.
This comes after the OFT signalled its intention to refer the UK PPI market to the Competition Commission and the FSA raised concerns about the poor standard of PPI selling practices. The FSA said PPI providers were failing to treat customers fairly by not providing enough clear information about the policy at the point of sale.
Liberal Democrat shadow chancellor, Vince Cable MP, slammed the policy which, he said, had been turned into a "cash-cow" by greedy banks, who abused a "deeply uncompetitive" market.
Shadow Financial Secretary to the Treasury, Mark Hoban, said consumers "raised legitimate concerns about the poor deal many feel they get."
He added: "It is important that people can get insurance when they lose their job or fall sick and we must ensure that consumers get a better deal."
The FSA is now considering whether it should expand regulations in the PPI sector. The watchdog said its PPI review report would be published in the first quarter of 2007, and its recommendations would be implemented by the end of the year.