The Financial Services Authority (FSA) is to
increase the consultation period for its review of the payment
protection insurance (PPI) market by a further six weeks.

All interested parties will have until 22
April to send further comments to the FSA about its proposed
remedies to the way sales of PPI are regulated.

CP response
The move comes in response to feedback to a previous FSA
consultation paper on proposals for regulating PPI sales, which
attracted a “very critical” response from the industry, although
the responses from consumer groups were “very supportive”, the FSA
said.

Financial research company Defaqto warned that
compensation for consumer PPI complaints could cost the industry up
to £3 billion. Motor dealers which sold PPI alongside car finance
agreements could find themselves on the hook for a share of this
figure – especially dealers which sold single-premium policies,
which were particularly criticised by the FSA.

Defaqto insight analyst Ben Heffer commented:
“[Single-premium policies are] the class of business which
attracted most complaints. If dealers are found to have mis-sold
the policy they could be responsible for reimbursing the whole
premium – not just the commission they earned on the deal.

“Further, the FSA require a root cause
analysis, and if other clients – who may not have complained – are
affected, they have to be reimbursed too.”

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.