FSA calls for transparent PPI cover

The Financial Services Authority (FSA) is urging financial providers to make the payment protection insurance (PPI) market as transparent as possible for consumers.

William Amos, who is Head of Retail Enforcement at the FSA has warned companies against using pressurised sales tactics in order to entice customers into buying PPI.

Mr Amos was speaking on BBC Radio Five Live's Wake Up To Money programme. He referred to the recent case of broker Loans.co.uk and its £455,000 fine for treating its PPI customers unfairly.

"It's important when customers go in to buy this product that they understand that they may already have existing cover," Mr Amos said and adding that the fine related to a need for adequate explanation as to what PPI policies cover, as well as what they do not cover.

The FSA are treating the area of transparency "very seriously" with Mr Amos implying that other firms could incur fines for mis-selling policies.

According to Simon Burgess, MD from independent protection insurance provider BritishInsurance.com, this is very positive news.

“It is about time that lenders were responsible for their actions,” he says “and now that the FSA is stepping in to put a stop to sloppy sales practices, hopefully other providers will start to act honourably”.

Burgess is a staunch believer in offering ethically priced, transparent policies to customers who need them and often ‘names and shames’ the lenders who “rip-off” consumers.

While there is still a long way to go until proposed new FSA regulations relating to PPI are discussed and enforced, hopefully the example made of Loans.co.uk will make other lenders rethink their policy pricing and sales practices.