FSA to consult further on PPI following "highly critical" industry response

The Financial Services Authority (FSA) is to embark on further consultation for its plans to reform the Payment Protection Insurance (PPI) market.

The renewed consultation is expected to last a further six weeks.

The FSA said that it received 51 detailed responses with consumer groups very supportive of the proposals and PPI providers, perhaps unsurprisingly “highly critical” of the proposals.

As a result the FSA said it would embark on more consultation. The regulator highlighted, for example, the fact that wider costs and consumer benefits had altered since the original consultation and wanted to test the revised financial assumptions with firms.

The FSA said it’s proposed package of measures was designed to ensure customers were treated consistently and fairly, either when buying new PPI policies or making a complaint about an existing one.

Dan Waters, the FSA’s director of conduct risk, commented: “We’re disappointed that the industry has responded so critically to our proposals but we remain 100% committed to bringing about genuine, lasting change in the PPI market. We do, however, recognise the importance in ensuring that genuine concerns have been listened to.

“Our commitment, nevertheless, is evidenced by the fact that we have halted single premium PPI sales, taken enforcement action against 23 firms, issued two ‘Dear CEO’ letters, undertaken three thematic reviews, conducted numerous mystery shops, and visited over 200 PPI providers. We remain firmly of the view that the PPI market is broken and needs to be fixed.”