Dozens of financial advisers and banks are continuing to mis-sell payment protection insurance (PPI) more than two years after the Financial Services Authority began a crackdown on sales practices in the industry.
Publishing its latest report into the PPI market yesterday, the City watchdog said that many firms were continuing to treat their customers unfairly, by failing to check whether the product was suitable for their needs before selling it to them, and failing to explain exactly what cover the policy would offer.
The FSA has been investigating the market for more than two years, while the Competition Commission launched its own inquiry into the market earlier this year. But the regulator revealed many lenders had not heeded their warnings that disciplinary action would be taken if standards did not improve.
"We have, on a number of occasions, set out clearly our requirements for the selling of PPI," said Clive Briault, the FSA's managing director of retail markets. "While some progress has been made by the industry, we are extremely disappointed that some firms have still made little progress in improving their sales practices. We will now strengthen our action against firms who fail to treat customers fairly when selling PPI."
Consumer bodies criticised the regulator yesterday. "These results are very disappointing," said John Howard, chairman of the Financial Services Consumer Panel. "The industry has been warned about problems in the sale of PPI before. But it would seem some parts of the industry continue to see PPI as an easy sale with big commissions, which outweigh the regulatory risks. I suspect there are major high street names at fault here and if that is the case I would expect to see them at the top of the FSA's list."
Peter Tutton, of Citizens Advice, who sparked the competition inquiry by making a super-complaint to the Office of Fair Trading two years ago, said he was "profoundly disappointed" by the FSA's report.Reuse content