FSA asks firms to stop selling single-premium PPI
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LONDON - The Financial Services Authority (FSA) has published a 'Dear CEO' letter to firms exhorting them to stop selling single-premium payment protection insurance (PPI) for unsecured personal loans as soon as possible but at the latest by May 29, 2009.
The UK regulator has honed in on the mis-selling of PPI since the launch of its Treating Customers Fairly initiative. The regulator fined UK bank Alliance and Leicester £7 million for PPI mis-selling in October 2008 and online bank Egg £721,000 for PPI abuse in December.
The FSA says its request is in line with previous statements asking firms to consider whether they should sell the controversial insurance policies and outlining concerns about poor sales practices.
A number of major banks have already stopped selling PPI and the independent Competition Commission's final PPI report on January 29 included a recommendation to prohibit the sale of single-premium PPI policies after October 1, 2010.
The Dear CEO letter may be read here.
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