Thursday 4th October 2007
A number of targets for improving the provision of payment protection insurance (PPI) have been missed, it has emerged.
According to the Financial Services Authority (FSA), lenders are still not serving their customers adequately when offering the product.
PPI promises to cover repayments on borrowing such as personal loans in the event that the individual cannot meet the monthly sum, the FSA explains.
Typically this is due to injury, serious illness, or a period of unanticipated unemployment which is not the fault of the policyholder.
While five of the areas identified by the FSA as being in need of improvement have been tackled, a further three remain inadequate.
These include the provision of clear details of what the product is and how much it costs, as well as the extent to which PPI protects the individual and whether they are eligible for it.
Furthermore, many lenders still fail to tell their customers why they have recommended that PPI be arranged, the FSA asserts.
Managing director of retail markets Clive Briault comments: "While some progress has been made by the industry, we are extremely disappointed that some firms have still made little progress in improving their sales practices.
"The right PPI can provide valuable protection for consumers, but they are entitled to expect that they will be treated fairly by firms when they buy it."
He adds that the information provided to customers should include an explanation of how PPI works, exactly what circumstances are covered and how much the policyholder should expect to pay for it.
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