FSA disappointed with PPI progress

Officials from the UK’s financial regulator, the Financial Services Authority, have stated that they are disappointed with the progress that has been made in the crackdown on the mis-selling of Payment Protection Insurance or PPI. The FSA said that financial companies have been too slow in stopping the mis-selling of this cover.

PPI is commonly sold alongside credit cards, loans, and other forms of finance, but over recent years has come under fire because of revelations that many firms and lenders have been mis-selling the cover in a number of ways. This includes hard selling the cover, adding it to finance without the knowledge of the consumer, and selling it to borrowers that did not even qualify for it.

Hector Sants, FSA chief executive, stated: “Progress made by firms in sorting out the issue has been disappointing.” He told a Treasury committee that the FSA had really been clamping down on the mis-selling of PPI, and that millions of pounds in fines had been dished out. However, he added: “We do agree that firms altering their behaviour has been slow.”

The FSA has been carrying out mystery shopping exercises, and the results of these have revealed that in many cases PPI policies are still being mis-sold even though the FSA has made its regulations clear to lenders and providers.