FSA extends consultation period for PPI reform
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The Financial Services Authority has published feedback to its plans to reform the Payment Protection Insurance market, but says it needs a further six week consultation as it has revised some of its original proposals.
In response to its consultation (CP 09/23), the FSA received 51 detailed responses from a wide range of stakeholders. It says consumer groups were very supportive of the proposals but PPI providers and industry groups were highly critical.
As a result of this feedback, there have been some revisions to the original proposals which, in the FSA’s view, warrant a further short consultation.
For example, the wider costs and consumer benefits have altered since the original consultation and the FSA wants to test the revised financial assumptions with firms.
The FSA’s proposed package of measures is designed to ensure customers are treated consistently and fairly, either when buying new PPI policies or making a complaint about an existing one.
Dan Waters, the FSA’s director of conduct risk, says: “We’re disappointed that the industry has responded so critically to our proposals but we remain 100 per cent committed to bringing about genuine, lasting change in the PPI market. We do, however, recognise the importance in ensuring that genuine concerns have been listened to.
“Our commitment, nevertheless, is evidenced by the fact that we have halted single premium PPI sales, taken enforcement action against 23 firms, issued two ‘Dear CEO’ letters, undertaken three thematic reviews, conducted numerous mystery shops, and visited over 200 PPI providers. We remain firmly of the view that the PPI market is broken and needs to be fixed.”
The FSA invites further comments on its proposals, and responses must be received by April 22 2010.
