Investigation by Financial Services Authority on PPI sales practice in motor retail trade underway
Two dealers censured by FSA for failures relating to their sales of PPI
MOTOR dealers who are concerned with adhering to the Financial Services Authority's policy of Treating Customers Fairly (TCF) can ensure customers get a fairer deal on payment protection insurance (PPI) by offering a stand-alone monthly paid policy, says PPI provider Paymentcare.co.uk.
Stand-alone PPI policies offer customers a credible alternative to expensive mainstream offerings and provide much better value for money, says Shane Craig, managing director of Paymentcare.co.uk.
“ payment protection insuranceis an integral part of car finance,” says Craig. “It’s essential that motor dealers are aware of the PPI policies available to them which can help ensure that they adhere to TCF as demanded by the FSA and, in turn, treat their customers fairly.”
"Payment protection insurance is an integral part of car finance," says Craig."It's essential that motor dealers are aware of the PPI policies available to them which can help ensure that they adhere to TCF as demanded by the FSA and, in turn, treat their customers fairly."
Single premium loan PPI has attracted considerable criticism since the investigation into PPI began.
“Following the super complaint about the PPI market by Citizens Advice to the Office of Fair Trading in September 2005, it has become abundantly clear that single premium loan PPI policies are not in the customer’s best interest,” he said.
"The cost of these policies is added to the loan and the whole amount then gathers interest, making the PPI exceedingly more expensive than necessary. A monthly paid policy from an independent provider offers far better value for money and can be cancelled at any time ensuring that customers only pay for the cover they actually need."
Following the watchdog's last phase of investigation of the PPI market last October, the Financial Services Authority imposed a public censure on two car dealerships for failures relating to their sale of PPI in connection with vehicle finance agreements.
"Sales staff must be clear on what it covers, what it costs and the fact that it is entirely optional,"said Craig." Customers often mistakenly believe they have to take the PPI in order to get the loan -and if the dealer doesn't ensure that their customers are properly advised by sales staff, he may find himself in trouble for failing to ensure his customers have been treated fairly.
Another benefit of offering customers PPI from an independent provider is that sales teams will only need to familiarise themselves with one policy rather than having to learn the different terms and conditions of several lender's PPI policies.
"Offering customers a stand-alone monthly paid policy will benefit both sales people and customers alike" says Craig.