Why the PPI industry clampdown spells good news for consumers

The payment protection insurance industry is facing a possible clampdown from official bodies, whose shocking investigations have revealed a market rife with over-inflated premiums; hard-sell tactics; and allegations of mis-sold policies.

Following on from the Citizen’s Advice Bureau (CAB)’s super-complaint in September 2005 in respect of the PPI sector, the Financial Services Authority (FSA) and the Office of Fair Trading (OFT) have both been involved in investigating the market.

Three companies have faced fines from the FSA for sloppy sales practices, which should hopefully make other providers think carefully about their own sales processes.

And a decision is still awaited from the OFT regarding a possible referral to the Competition Commission. Is this does happen – and the industry consensus is that it will – a full investigation will look at the industry with a fine toothcomb. This is good news for consumers as any recommendations as a result of the investigation could include price capping and more transparent policies.

Already the FSA is proposing more ‘awareness’ of PPI products and its pricing. It has said that companies could be asked to make their terms and conditions more understandable for consumers.

Overall, if it happens, the clampdown on the industry will make a huge contribution to the consumers’ cause, as they will be empowered to get the best products and at much lower prices.

Until there is a clampdown, the best deals are available from standalone protection insurance providers like BritishInsurance.com who provide low cost, high quality loan, mortgage and income protection policies.