The Financial Ombudsman Service has raised concern about non-insurance products that look like PPI, amid many complaints confusing similar product types.
According to FOS' March-to-April update (Issue 108), some PPI complaints have been involving "insurance-backed" products that are similar to PPI, but also many involving products that are not insurance at all, such as debt-freeze products.
Natalie Ceeney, chief executive and chief ombudsman at FOS, said: "Although the different products available work in different ways, they all offer some sort of financial protection when a consumer finds themselves in financial difficulty.
"Unfortunately, the similarities do not end there. Although we haven't seen the widespread problems we have seen with PPI, we have received a number of complaints about these products that have raised similar issues - for example, whether a business provided advice about the product with reasonable care and skill, or whether it gave the consumer information in a way that was clear and not misleading."
She said the FOS approach tended to be the same as that for PPI, given the similar issues despite technical differences in the products.
The FOS also found consumers were often confused about whether the product they had was PPI or some other form of payment protection product.
Ceeney said "understandably" consumers found it difficult to tell the products apart, adding: "The Financial Services Authority and Office of Fair Trading recently published joint guidance for businesses about "new payment protection products". And over the last couple of years, we have seen more cases involving different "payment protection products."
The FOS highlighted case studies to illustrate common situations with PPI complaints including; consumer feeling that a debt-freeze plan was inappropriately sold; consumer disappointment over expectations of a product bought, when their circumstances changed; and claims-management companies mistakenly thinking a debt-freeze plan was a form of PPI.
Ceeney said: "It is disappointing that we also see some businesses and claims-management companies failing to identify the actual product that a consumer was sold and is now making a complaint about. This can lead to unnecessary confusion, delay and frustration on all sides."
