The Financial Services Authority (FSA) has today welcomed the move by Alliance & Leicester, Barclays, The Co-operative Bank, Lloyds TSB, Halifax Bank of Scotland, and RBS/Natwest to stop selling single premium Payment Protection Insurance (PPI) with unsecured personal loans by the end of January 2009.
Some of these firms, along with other market players, now offer or plan to offer regular premium PPI instead of a single premium product. The FSA say they expect other firms still selling single premium PPI to take note of these developments.
The FSA made it clear that it recognises the importance of appropriate protection insurance in the current economic climate, but remains concerned over the standard of sales of single premium PPI. Customers being sold this type of product should be told how the product works, what it covers and how much it costs ? especially as the cost of the PPI is added to the loan and interest charged on this amount.
Jon Pain, FSA?s managing director of retail markets, said: ?We are pleased these firms have stopped selling single premium policies and would expect other firms to notice these developments and review their own positions. A PPI product can be helpful for customers wanting protection on a specific credit agreement, as long as the policy is sold appropriately.?
Nick Pearson, Director of External Affairs at Paymex said ?People who have credit commitments should always check to see if they are covered by PPI as many people who could claim on these policies forget to do so. We would also urge consumers without PPI who are facing redundancy to get advice about repaying their debts indeed if they have made a claim on a policy and been turned down by the insurer.?