New measures around the payment protection insurance (PPI) market will ensure customers are treated more fairly when complaining about the product and when buying a policy.
Consumers that have bought or are buying PPI – which covers loan or debt repayments if you are not able to work due to accident, sickness or loss of employment – will be better protected under the changes, while firms will have to improve their handling of complaints.
The rules and guidance:
- oblige firms to handle complaints properly and offer redress where appropriate;
- require firms to analyse past complaints to identify if there are serious flaws in sales practices that may have affected complainants and even non-complainants; and
- set out common sales failings to help firms identify bad practice when selling PPI and handling complaints.
The measures must be implemented by 1 December 2010, with the time until then used to update systems and procedures, and meet any resourcing or staff training needs.
Fairness failings
Dan Waters, director of conduct risk, said: ‘This remedy is fair to consumers and the industry alike.
‘The onus is now on the industry to ensure it treats all customers fairly. We will be monitoring the implementation of our guidance closely to ensure real change is delivered.’
Since we took over the regulation of PPI in 2005 we have taken action against 24 firms for failings in PPI sales, with fines totalling nearly £13m.
We have also focused on complaints handling procedures. Firms on average reject almost half of the PPI complaints they receive, but some reject nearly all, according to figures we received from 18 major sellers of PPI.
Nearly a third of rejected complainants go on to the Financial Ombudsman Service (FOS), where more than 80% are overturned in the consumer’s favour.
What to do if you have a complaint
If you have a complaint about the PPI you have been sold, you should first complain to the firm that sold you the policy, to give them a chance to put things right. If your complaint is about a claim, you should complain to the insurance company.
If you have already complained but are not happy with the outcome or how your case has been handled you may be able to take the complaint to the FOS.
The new measures for the PPI market were published in our Policy Statement and follow up on our commitment to reform the market and build on the agreement we secured from the industry in 2009 to stop selling single premium PPI on unsecured personal loans.
Last updated: 10 August 2010
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