On January 24, the FSA and the Office of Fair Trading (the OFT) published their joint finalized guidance on payment protection products. The guidance sets out what the FSA and OFT require of firms as they seek to develop new payment protection products to meet the needs of consumers similar to those met by payment protection insurance (PPI). The guidance stresses that new payment protection products may pose similar risks as PPI. When developing new payment protection products, firms should be mindful of the importance of:
- identifying the target market for the protection;
- ensuring that the cover offered meets the needs of that target market; and
- avoiding the creation of barriers to comparing, exiting or switching cover.