PPI fines set to increase in the new year?

In September it was announced that the Financial Services Authority had fined Regency Mortgage Corporation £56,000 for payment protection insurance mis-selling. I commented then that it would come as no surprise if more intermediaries succumbed to the wrath of the regulator over the next few weeks. Since then, loan broker Loans.co.uk has been fined £455,000 for failing to treat customers fairly when selling PPI and, three weeks later, Capital Mortgage Connections received a £17,500 fine for cold calling potential customers and being unable to demonstrate it gave appropriate pricing information on ASU policies. Over 97% of its policies are sold on a single premium basis.

Since these fines relate to FSA visits undertaken in 2005, I suggest this is the thin end of the wedge. The FSA reports 'the sale of PPI is a priority due to the potential level of risk to consumers. We take this very seriously'.

I too have been taking this issue seriously for a number of years, and those who are quick to criticise me for constantly lambasting unscrupulous PPI providers and single premium sales will now perhaps realise there is some truth in my observations.

It is not simply a case of 'Burgess speaking hot air', these fines clearly demonstrate this sector has more than a few bad apples.

I am in no doubt that the number of PPI mis-selling fines will increase over the coming months and while I welcome the FSA's new tougher stance, I do not feel vindicated. Instead, I am saddened. After all, it is our industry's reputation that will suffer.

Simon Burgess, Managing director, Britishinsurance.com.