185,000 PPI complaints to be reopened | PPI Claim
Companies which sold payment protection insurance (PPI) will have to reopen 185,000 rejected complaints in light of new guidance over how the scheme should be sold. Make a PPI Claim now >
The Financial Services Authority has ordered firms to redress the complaints under new guidance that will come into force at the end of 2009. It also means that companies representing more than 40 per cent of face-to-face sales in the single premium unsecured personal loan PPI market will review sales and redress those consumers identified as mis-sold.
The regulator said ongoing supervisory action continues with the remainder of this market place.
The move is part of a series of measures which build on agreement the FSA obtained from the industry earlier in 2009 to stop selling single premium PPI on unsecured loans.
The FSA is also launching targeted assessment of sales practices for PPI on loans and credit cards. If the potential for mis-selling is identified, pro-active reviews by firms may be extended to these areas too.
Jon Pain, managing director of retail markets for the FSA, said: “Consumers should not be pressured or deceived into buying PPI and they are entitled to have a policy properly explained to them. It is unacceptable that despite previous warnings about poor sales practices, backed by 22 enforcement cases and significant fines, the PPI sector still needs the FSA to intervene on this.
“The outcome of a complaint about a PPI sale should not depend on whether or not the complainant persists past the firm on to the FOS.”
He added: “This is the last chance for the industry to show that it can act fairly, consistently and in the best interest of consumers on PPI. All firms operating in this sector should take note and where necessary get their house in order.
“Where we find questionable practices in sales or complaint handling, firms can expect that we will take action.”
Adam Phillips, chairman of the Financial Services Consumer Panel, said: “The selling of PPI has a notorious history. We welcome the FSA’s proposal today to force firms to re-visit all rejected complaints about sales of PPI and re-examine them against new FSA guidance.
“However, this action has taken a long time, and the FSA still needs to tackle PPI sold with credit cards, secured loans and mortgages where people may not have complained. We also still await FSA enforcement action against individuals in some of the bigger players who were responsible for the mis-selling of PPI.”
