Paymentcare, the standalone payment protection insurance broker, has given its full support to the Financial Services Authoritys call for firms to take urgent action to ensure selling practises for PPI are in line with regulatory requirements.
The FSA initiative comes hard on the heels of a mystery shopping exercise that uncovered poor selling practices and a lack of proper compliance controls among several providers.
Shane Craig, managing director of Paymentcare, says: “We have consistently called for tighter controls of the selling of this cover on the high street. Vincent Cable, the Liberal Democrat shadow chancellor, recently lent his backing to our campaign for the Office of Fair Trading to crack down on rogue sales practises, and we are particularly concerned at the evidence that providers persist in selling expensive single premium cover to people who are not fully aware of what they are buying.
“We agree with the FSA that when properly structured, explained and sold, payment protection insurance provides worthwhile cover for consumers against unexpected changes in personal circumstances. But there is a fundamental lack of awareness among consumers as to how much they can save by going to a reputable broker, rather than accepting the banks and building society premiums, which can be four times more expensive than broker prices.”
Last weeks FSA investigation found that around half of the firms surveyed failed to take reasonable steps to ensure that customers did not buy policies on which they could not claim or which provided only limited cover. It also claimed that advice on PPI was “often likely to be poor and training and competence of sales staff was not adequate in around half of firms.”