It has been designed to assist members with their PPI sales procedures. The factsheet has been produced with regard to the numerous issues raised by both the Financial Services Authority (FSA) and the Office of Fair Trading (OFT) in their work into the PPI sector.
Following its thematic work into PPI last November, the FSA urged firms involved in the sale of PPI to review their sales practices. This is to identify concerns and take action where improvements are needed. The OFT’s recent ‘Emerging Issues’ report on PPI has also highlighted further concerns.
The FSA’s thematic work identified 10 key concerns. These included the risk of inappropriate sales; poor quality advice; lack of consumer clarity over whether PPI is optional; over-reliance by firms on product documentation; and the lack of compliance with product and price disclosure rules, amongst others. The FSA also revealed concerns regarding the sale of PPI with regard to its high level principles and its work on ‘Treating Customers Fairly’.
The factsheet is in a checklist format for members to identify the areas which may need to be addressed. It covers the following areas:
- Risk of Inappropriate Sales
- Non-Advised Sales
- Customer Needs – Advised Sales
- Demands & Needs Statements
- Inducements and Sales Targets
- Product and Price Disclosure
- Training and Competence
- Compliance Monitoring
“Members should consider the issues already raised by both the FSA’s and OFT’s work and use the AFB factsheet to review their firm’s PPI sales procedures to ensure they are compliant with current regulation. We will continue to keep members informed of any future developments.”
