Calls over protection insurance
Updated on 26 September 2008
A consumer group has called on the City watchdog to take action to ensure that all people mis-sold controversial payment protection insurance are compensated.
Which? Money is urging the Financial Services Authority to take a number of steps relating to the sale of the cover, including ensuring all PPI sales at firms found guilty of mis-selling are reviewed.
It also wants companies to write to all customers with one of the policies, giving them personal information on how much they paid for it.
It said the letters should also include FSA fact sheets explaining what an appropriate and an inappropriate sale would have been and giving details on what consumers should do next if they think they have been mis-sold a policy.
Payment protection insurance, which covers debt repayments if the holder is unable to work or loses their job, has come in for heavy criticism in recent years, following claims that it is overpriced and often mis-sold to people who will never be able to claim on it.
Which? Money is calling for a focused review of all single premium loan PPI, where the cost of the insurance cover is paid up front and often added to the amount borrowed.
It also wants the regulator to develop a redress payments calculator for PPI to ensure that people who were mis-sold the product receive a fair level of redress.
Which? personal finance campaigns manager Doug Taylor 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.
"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."
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