The sale of PPI has been high on the FSA’s agenda since the results of its mystery shopping exercise into the sector last year. The Office of Fair Trading (OFT) also launched a market study this week to look in-depth at the PPI sector, following a super-complaint from Citizens Advice last year, and it is expected that both FSA and OFT will work closely together on this issue. The industry has been ‘put on notice’ to improve PPI sales practices and urged to consider changes to the PPI products available.
The results of AMI’s census show 92% of respondents support ‘de-linking’. This would enable customers to be clear they are free to choose a PPI provider that is separate from the lender, and would mean that PPI would not be compulsory with any mortgage scheme, allowing advisers to compare the terms available from different PPI providers.
93% of respondents support ‘de-bundling’ allowing each benefit to be bought separately, as appropriate to the customer’s sick pay or other relevant circumstances.
Rob Griffiths, associate director at AMI, commented: “The PPI market is certainly in transition at the moment and it seems clear from our Intermediary Census results that AMI members are in favour of the development of fairer, more transparent products. Support for ‘de-linking’ and ‘de-bundling’ of PPI products was almost unanimous and the introduction of these changes will have a positive impact on the suitability of PPI as a protection product.
“AMI will continue to represent the views of its membership to the FSA and OFT and work for a combined industry solution to the issues the regulator raised last year.”
