In November 2011 the Financial Service Authority (FSA) announced it would be working in conjunction with the Office of Fair Trading to monitor the development of new payment protection policies and to prevent a repeat of the mis-selling issues that have dogged PPI in recent years.
This action has been taken following the introduction of a number of new products onto the market. With the reputation of payment protection insurance in tatters following the mis-selling scandal, providers seem to be developing a range of new products offering similar financial protection. These new products include Debt Freeze and Debt Waiver cover. Given these products will be attached to loans and mortgages and will be sold in a similar way to payment protection they will clearly be potentially susceptible to the mis-selling problems associated with PPI. The FSA has already made it clear that PPI providers must improve standards and seem keen to take a proactive approach with regard to new products emerging within the market.
The FSA has urged all providers developing new products to consider the needs of the customer first. They have identified four distinct areas that they believe give cause for concern and have stressed providers should think carefully about:
Even with the FSA offering guidance it is obvious that PPI providers must improve standards internally and introduce their own internal processes to prevent a repeat of the mis-selling scandal.
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