FSA censures UK banks over unclear information

The UK's airwaves and newspapers were full of articles about payment protection insurance (PPI) in October, after the Financial Services Authority scolded banks for failing to "treat customers fairly" when selling this product to them. According to the FSA, many firms are still not giving customers clear information during the sales conversation, it is not being made clear that PPI is optional, and customers are not getting full information about how much the insurance will cost. Customers are also still not being made fully aware that there may be parts of the policy under which they cannot claim, according to the regulator.

"The bottom line is that customers should come away from the sale having been given the best possible chance of understanding that PPI is optional, what the policy will and will not cover and how much it costs," says the FSA's managing director of retail markets Clive Briault. "On the strength of our findings, the industry has further to go to demonstrate that customers really are being treated fairly in this market."

The consumer banking industry has come in for sharp criticism from the UK government of late. Several months ago, credit card companies and banks were told to lower their fees for late payments. Fees for clearing bounced checks are also being examined.

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