Research Finds That PPI Mis-Selling Is Still Rife
The Financial Services Authority, (FSA) has been sickened by the fact that financial institutions all but ignoring their previous efforts to regulate the PPI (payment protection) market.
In their latest initiative, they sent mystery shoppers into all of the major high street financial institutions, and found that PPI was still being mis-sold ad nauseum, alongside unsecured personal loans.
The FSA is said to be alarmed at the fact that the flexing of their regulatory muscles has seemingly had little or no effect. The scenario is a lot worse than they expected it to be, and customers are still receiving a serious lack of information, when it comes to being sold the policies. Customers are still being kept in the dark, even when they are being sold policies, face to face with an advisor.
All in all, the FSA found that more or less none of their phoney customers were informed verbally, of how much the policies were going to cost, and indeed the fact that they would accrue interest. Less than half were told about all of the restrictions, that hamper claimants, when they do need to use the policies, and certain companies were incapable of even telling customers the overall cost of the PPI policies that they were being sold.
During a previous investigation, the FSA set out rigid guidelines for financial institutions, as to how they should sell PPI in the future.
This has seemingly been ignored in a lot of cases, and the legislature that was put in place, in order to both enlighten and protect the consumer, has fallen by the wayside. All in all it just smacks of apparent sales incompetence.
People are not being made aware of the fact that their borrowing is being increased considerably by PPI. This is due to the fact that they are effectively borrowing the premium for the PPI, as it is being added to the cost of the loan, and being rendered subject to interest.
And the scenario worsens for anyone that has PPI on a loan that extends past five years, because once the PPI has expired, they are still in a position where they are paying interest on it.
It is easy to blame the financial institutions, as they are chiefly to blame. But what about the FSA? They are the ones that are meant to be regulating everything, so they are obviously doing something wrong, if the financial institutions fell that it is more beneficial for them to completely ignore the FSA. The FSA needs to implement more of its enforcement powers, to let the financial institutions know that they really mean business.
It is the matter of single premium PPI that appears to be causing the greatest amount of bother. It surely must be a case of tighter legislature, in relation to this, or the removal of it altogether. Perhaps single premium PPI should continue to be sold, but not made subject to interest?