Consumer watchdog hits out at PPI market for taking advantage of a couple.
A couple who paid £22,568 in payment protection insurance (PPI) for a £56,000 loan is an example of why the Financial Services Authority (FSA) should overhaul of the PPI market, says Which?.
Doug Taylor, personal finance campaigns manager for the consumer champion, said: “Slapping firms on the wrist with large fines is a start but doesn’t go far enough. The fact that firms are still being fined for PPI failings shows that the problem won’t go away on its own and PPI’s relatively low profile means the number of complaints doesn’t necessarily reflect the number of mis-sold policies."
He adds: “The FSA must do more to deter firms from mis-selling in the first place, ensuring that all victims of mis-selling are automatically compensated with a fair and robust system.”
Which? has called for the FSA to ensure that all PPI sales from firms found guilty of mis-selling should be pro-actively reviewed and where mis-selling has occurred, and customers are adequately compensated. It also called for an "endowment-style" FSA and company communication strategy, whereby companies write to all customers with a PPI policy enclosing personalised information on how much they have paid. It added that the information sent to customers should contain FSA factsheets explaining the concerns with the PPI market; an explanation of what would be an appropriate sale; and what to do next if you think you were mis-sold.
