Since 2005, the FSA has been carrying out a thematic review of the sale of PPI, the principal aim of which is for firms to improve their sales standards. The third phase of the FSA's thematic review on PPI involved a mystery shopping exercise in respect of face to face sales of PPI alongside unsecured personal loans. The FSA considers that the results of this exercise were poor and as a result has concluded that it needs to escalate the level of regulatory intervention. It is considering appropriate action to:
1) deal with ongoing non-compliant sales practices; and
2) identify and remedy non-compliant past sales.
The FSA notes that there are various additional issues to consider in the context of its thematic review of PPI. There has been a marked increase in the number of PPI complaints received by authorised firms and by the Financial Ombudsman Service (FOS). Consequently, the FSA is considering whether a regulatory solution would be more appropriate to deal with these complaints rather than the FOS deciding each individual case. The FSA is also consulting with trade associations and consumer groups with a view to improving the handling of PPI related complaints by firms. The European Commission is also conducting its own work to improve competition in the PPI market for the benefit of companies, customers and the economy.
A further update on the FSA's thematic review will be published in the first quarter of 2009.