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BROKER GIVES FULL SUPPORT TO FSA CALL FOR PROVIDERS TO OVERHAUL LOAN PAYMENT PROTECTION INSURANCE PPI SALES METHODS

- Paymentcare welcomes watchdog mystery shop findings
-Vincent Cable MP joins UK’s leading stand alone Loan Payment Protection Insurance broker in demanding greater consumer protection

PAYMENTCARE,the UK’s leading stand alone loan payment protection insurance (PPI) broker, today gives its full support to the Financial Services Authority’s (FSA) call* for firms to take urgent action to ensure that their selling practices for loan payment protection insurance (PPI) are in line with regulatory requirements.

The FSA initiative comes hard on the heels of a mystery shopping exercise that uncovered poor selling practices and a lack of proper compliance controls among several providers.
“We have consistently called for tighter controls of the selling of this cover on the High Street,” said Paymentcare managing director Shane Craig.

“Vincent Cable, the LibDem shadow chancellor, recently lent his backing to our campaign for the Office of Fair Trading to crack down on rogue sales practises, and, like the FSA, we are particularly concerned at the evidence that providers persist in selling expensive single premium cover to people who are not fully aware of what they are buying.

"We agree with the FSA that, when properly structured, explained and sold, payment protection insurance provides worthwhile cover for consumers against unexpected changes in their personal circumstances,” added Craig.

“But there is clearly a fundamental lack of awareness among consumers as to how much they can save by going to a reputable broker, rather than accepting the banks’ and building society premiums, which can be four times more expensive than broker prices.”

Last week’s FSA investigation found that around half of the firms surveyed failed to take reasonable steps to ensure that customers did not buy policies on which they could not claim or which provided only very limited cover; it also claimed that advice on loan payment protection insurance (PPI) was “often likely to be poor – and training and competence of sales staff was not adequate in around half of firms.”

* The report The sale of payment protection insurance - results of thematic work is available on the FSA Website at: http://www.fsa.gov.uk/pubs/other/pii_thematic_report.pdf