FSA requests withdrawal of single payment PPI
The FSA has written to all firms still selling single premium payment protection insurance (PPI) with unsecured personal loans, asking them to withdraw the product as soon as possible, and by no later than 29 May.
The letter, sent to chief executives, follows the decision last month by a number of major banks to stop selling such products, some of which intend to switch to selling regular premium PPI. The letter's author, Jon Pain, the FSA's managing director of retail markets, also noted that the Competition Commission's final report on its PPI market inquiry, published on 29 January, included a remedy that prohibits the sale of single premium PPI policies after 1 October 2010.
It continued: "We recognise the severity of the current economic climate and the financial problems many consumers are facing. Moreover, we believe that PPI can play an important and legitimate role to cover repayments on specific credit agreements for consumers facing job loss, or other issues at this difficult time. However, our focus remains on how this product has been, and continues to be, sold and whether consumers have been treated fairly during the sales process.
"We therefore request that if your firm has not already done so, it stops selling single premium PPI with unsecured personal loans as soon as possible and in any event by 29 May 2009. In view of our ongoing concerns across the single premium market over the standard of sales, we believe this request is justified to bring an orderly withdrawal of single premium PPI from the market."
