High street banks remain silent on PPI criticism
High street banks and building societies failed to defend their products at a stakeholder meeting held to discuss the Office of Fair Trading's (OFT) damning report on the payment protection insurance (PPI) market, COVER has learnt.
The OFT invited interested parties to respond to its recent report, which highlighted problems such as poor product value, inflated profits and lack of transparency in sales.
Representatives from the biggest players, including Abbey, Alliance & Leicester and HBOS, were present but, according to industry sources, failed to fight back against the OFT's criticism.
Simon Burgess, managing director of Britishinsurance.com, who was present at the meeting, said that all the major providers seemed to accept the OFT's findings.
"None of the high street providers stood up, fought back and disputed that they were charging too much. Their silence spoke volumes that they accept the criticism," he said.
However, Steve Gracey, spokesperson for Alliance & Leicester, said it remained silent simply because no new issues emerged.
"We had already given our private comments to the OFT on its paper. As no new issues were brought up, we didn't feel the need to speak," Gracey said.
Other bodies present at the meeting, including the Association of British Insurers (ABI) and the Financial Services Authority (FSA), remained tight-lipped about the discussion.
Malcolm Tarling, spokesperson for the ABI, said the meeting had been productive and its members were already working to improve products. "We are working on developing standard definitions to make products more transparent," he said.
Samantha Bennett, who is spokesperson for the FSA, said she would not comment on whether the meeting was a success.
"All I can say is that we are working closely with the OFT on this issue, as PPI is a priority for us," she said.
The FSA has launched its own separate investigation into the market after a mystery shopping exercise last year uncovered poor selling practices. Bennett said that phase two of its investigation would be delivered this autumn.
An OFT spokesperson described the meeting as very productive. "We can't say what was specifically discussed or who else was there, but we can say we are happy with what happened. We are considering what was said by various stakeholders and will publish an update by the end of this year," he said.
Despite being invited to comment on the outcome of the meeting, at the time of going to press Abbey and HBOS had failed to respond.
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