With PPI having already been referred to the Competition Commission, following concerns raised by the Financial Services Authority (FSA) and the Office of Fair Trading (OFT) over mis-selling practices, the BBC report indicated that 10 well known organisations, including high street lenders, could face fines of up to £1 million within the coming weeks as a result of failings in their PPI sales policies.
Discussing the BBC report, Shane Craig, managing director at Paymentcare, said: “I am surprised that the report has suggested that only 10 lenders would be fined.”
The FSA has recently updated its guidance regarding PPI, indicating that many firms were failing to make it clear to consumers that PPI is optional. A number of firms are also failing to detail the costs, and explain to the consumer the nuances of their cover, the regulator reported. The watchdog also suggested that some firms failed to collect sufficient information from the customer when recommending a policy.
Simon Burgess, managing director at Britishinsurance
.com, welcomed the report. He said: “I think a report and subsequent enforcement into the PPI market is long overdue and very encouraging. There has been a lot of industry talk about a pipeline of enforcement and the only surprise is the small number of lenders that the report suggested would be hit by the fines.”
He added: “PPI is a lucrative sector and brokers should be making more from this market.”
