MPs are concerned over Payment Protection Products

The Treasury sat today, 24 October 2006, with the Chairman and Chief Executive of the FSA to discuss MP’s concerns over 'dodgy' payment protection insurance (PPI) products.

FSA Chairman Sir Callum McCarthy and Chief Executive John Tiner agreed that these policies do not always work in the best interests of the consumer.

The market is worth £5.5bn, with banks selling it alongside loans and making huge profits.

Angela Eagle - Labour MP – said that sales based on commission would ultimately lead to consumers being sold products they either did not need or would not pay out if people lost their jobs.

She asked: 'Doesn't it come back to the business model, where there's a lot of hidden stuff going on and people who are selling these very dodgy products are actually on huge commissions and they're basically ripping off customers?'

The FSA Chairman replied that PPI was 'not in its nature a dodgy product'. He said: 'It is a product which meets a real need and the challenge for us is to make sure people treat their customers better and there are lots of examples of people not doing that and that is why we are taking action against a number of firms”.

Simon Burgess, industry champion and MD of BritishInsurance.com who provides acclaimed low-cost PPI products said: “I am concerned that brokers and lenders make people understand how much they are paying.

“They should understand that they can take out a loan without taking PPI or that they can buy a standalone product for up to 80% cheaper than what is offered by some lenders”.