FOS criticises PPI providers

12/09/2008

Card and loan providers must improve their selling practices for Payment Protection Insurance (PPI), the ombudsman said yesterday.
According to the body, there has been a marked rise of customer complaints about the insurance recently.

The Financial Ombudsman Service (FOS) added, however, that these concerns were not being properly dealt with by banks, insurance firms and other PPI providers.

Controversy over the cover has been sparked recently when it was revealed that in many cases the loans insurance was being sold as a "default" option - rather than a separate product that carries its own premiums charges.

Eleven financial firms have been sanctioned by the regulator so far this year for this mis-selling.

An FOS spokesman commented: "PPI complaints have risen ten-fold in the past two years, and are now about 25 percent of all the complaints we get." He also pointed out that a majority of these were upheld."

Speaking to the BBC, the spokesman added: "The complaints are so similar to those we have already settled in consumers' favour that we are worried that [PPI providers] are not learning the lessons from this and are not treating customers fairly."

PPI helps to cover loan repayments when the policyholder faces a sudden loss of income, often through being made redundant.

Tags; Debt Management and Banking, Young Family Finances, Credit Card Lifestyle,

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