Hailed as one of the largest programmes of thematic work ever undertaken by the FSA, it will include mystery shopping and an extensive programme of follow up work with firms with inefficient business practices as well as visits to a sample of companies not previously visited.
The regulator has warned that enforcement action will be taken where necessary and that particular emphasis will be placed on firms for whom PPI sales are a minor activity compared with their main line of business. A review of its current rules on PPI will also take place.
The regulator has given a deadline of June 2007 as the completion date for its work. It has confirmed it will test whether the customers are told PPI is optional where necessary; that information about the product and its cost are clear; and that the product meets consumer needs.
Clive Briault, managing director of retail markets at the FSA, said: “Improving sales standards in the PPI market remains a key priority for us and we see it as an indicator of whether firms are treating customers fairly."
Bill Warren, compliance director at Complete Mortgage and Loans Services, welcomed the news. He said: “I am pleased that the FSA is following up its earlier work so thoroughly and quickly. Its previous findings have created a great deal of concern among the mortgage industry and the sooner the regulator gets stuck in and achieves results, the better.”
