The move follows firms selling PPI on websites, with the use of ‘pre-ticked’ boxes. The FSA had originally expressed its disappointment with this action, indicating that borrowers could opt for PPI without making an active decision to do so.
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As a result, firms have agreed to remove pre-ticked formats on websites where PPI was automatically included, to ensure customers are aware of their choice.
Vernon Everitt, director of retail themes at the FSA, indicated that following its initial review, the regulator had been working to improve practices within the sector. He said: “We have made PPI a top priority and are pleased that firms have agreed to change the way they sell PPI over the internet. Naturally, many customers are focused on getting the loan itself, but it is just as important that they also think about whether or not they want to protect their loan repayments by taking out PPI cover.
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This change means that it will be up to the customer to actively choose to buy PPI rather than it being sold automatically.”
Ray Boulger, senior technical manager for John Charcol, said: “I think it’s the right way to go and it’s not just PPI but all insurance that should be sold in this way. Any tightening up of how PPI is sold is good and I hope the FSA will extend it to other areas.”
