Money News

New rules ensure fair treatment over payment protection

By Dominic Welling dominic.welling@consumerchoices.co.uk

If you want to complain about being mis-sold payment protection insurance (PPI), new rules will make it easier.

Reforms to payment protection insurance (PPI) market will ensure customers are treated more fairly in future.

PPI has been widely mis-sold for years, resulting in some massive fines by the money regulator - the FSA has taken action against 24 firms and individuals for PPI failings with fines totalling approximately £13 million.

Payment protection, however, does have its place and helps people who fall ill or lose their jobs keep up with their financial obligations.

Unfortunately, most PPI policies are sold alongside a loan or credit card and many consumers are unaware that they could shop around for the best price and a product suitable for their circumstances.

The measures from the Financial Services Authority will ensure customers are treated more fairly when complaining about PPI and better protected when buying the product.

Dan Waters, the FSA’s director of conduct risk, said: “We look forward to consumers being treated fairly whether they are buying or complaining about PPI.

“Since we took over the regulation of PPI we’ve carried out 24 investigations and three thematic reviews, issued warnings, halted the selling of single premium PPI with unsecured personal loans, visited over 200 firms, and handed out some very significant fines.

“Now, with this package of measures we’re confident we can mend a market that has been broken for too long.”

The package of measures must be implemented 1st December 2010.

The measures include:

• A handbook to ensure complaints are handled properly, and redressed fairly
• An explanation of when and why firms should analyse their past complaints to identify if there are serious flaws in sales practices that may have affected complainants and even non-complainants; and
• An open letter setting out common sales failings to help firms identify bad practice.

The FSA said it would monitor firms closely to ensure the new standards are met.

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