Discussing the emerging issues in the PPI market, the meeting gave organisations and industry trade bodies the opportunity to voice their concerns. It followed a report by the OFT highlighting issues around competition in the marketplace, commission payments, profits and claims ratios.
Central to the meeting was the concern that consumers believed PPI would assist an application for credit. The report by the OFT revealed 27 per cent of consumers assumed or were given the impression from the lender that accepting PPI would help their application for credit.
Simon Burgess, managing director at britishinsurance.com, called for an overhaul of the current PPI market. He said: “It seems many players in this market realise their stance is indefensible and are waiting until they are forced to make changes, rather than act voluntarily. I think they realise an overhaul of the PPI market is just around the corner.”
He added that the Financial Services Authority’s (FSA) ‘Treating Customers Fairly’ (TCF) approach should prompt market change. “Many of the bigger players seem to think they are beyond the reaches of the regulator. Certainly in light of the FSA’s TCF initiative it would seem many of their practices are out of line, yet they continue to do nothing.”
Shane Craig, managing director at Paymentcare, added: “I would like to see the de-linking of products and mechanisms in place so that if PPI is mentioned by the lender, they should have to say PPI is also offered by other lenders and not just by them.”
