The Financial Services Authority (FSA) has announced that there have been further improvements in the payment protection insurance (PPI) selling standards.
According to the financial watchdog, the latest research carried out by the organisation has revealed that insurance companies offering PPI are now doing so in a more responsible manner. However, the regulator adds that there remains much work to be done in this area and that firms still need to make every effort to ensure that they are treating their customers fairly.
There were some notable areas of improvement, the FSA found, with the vast majority of PPI insurance providers now making it clear to customers that PPI is optional rather than compulsory. Another key sector in which there was an improvement was in the number of firms willing to offer cancellation refunds on virtually all of their single premium PPI policies, the watchdog explained.
However, despite this good progress, which was welcomed by the FSA, other areas showed a disappointing level of improvement and the regulator has highlighted them as subjects on which the industry needs to focus in the near future. One of the main criticisms of PPI providers reported by the FSA's research remains a lack of information being provided to consumers explaining the product and what it will cost.
The FSA has warned that it will now look to crack down on those providers that are failing to keep to its rules and are not providing adequate information to consumers. FSA chief executive, Clive Briault, said: "While some progress has been made by the industry, we are extremely disappointed that some firms have still made little progress in improving their sales practices."
He added: "The right PPI can provide valuable protection for consumers, but they are entitled to expect that they will be treated fairly by firms when they buy it. They must be told how this product works, what it covers, and how much it costs."
The FSA also lamented a failure of some providers to tell why, where advice is given, the recommended PPI policy meets their demands and needs.
In a warning to PPI providers to improve their practices to meet the highest standards, Mr Briault concluded: "We will now strengthen our action against firms who fail to treat customers fairly when selling PPI."