The FSA recently looked at a number of leading loan providers and found many were using ‘pre-tick’ box techniques on their websites, meaning customers were buying PPI cover they either didn’t need or were paying over the odds for.
As a result, the FSA wrote to the firms inviting them to change their selling tactics. According to Simon Burgess, of British Insurance, this is ‘too little, too late’ and more is needed to stop consumers being ripped-off.
He said: “Although I welcome any intervention to reduce PPI mis-selling, the FSA has been somewhat sluggish to act. Which? Magazine undertook research into this months ago, detailing how consumers obtaining loans over the 'phone or internet were being tricked into buying PPI cover. Well-known online providers such as Lloyds TSB, Natwest and Tesco were named and shamed then, so why has it been left until now to castigate them?
“Over the past few months, recent interest rate rises have no doubt pushed more homeowners into debt and these online ‘cons’ are preying on their vulnerability. With people being stretched financially, it’s vital that organisations involved in the ‘policing’ of PPI sales act swiftly and assertively to tackle the issues of unfair sales tactics, high commission rates, price differentiations and product variations. Until they do, consumers will continue to suffer.”
