The measures include:
• new handbook guidance to ensure complaints are handled properly, and redressed fairly where appropriate;
• an explanation of when and why firms should analyse their past complaints to identify if there are serious flaws in sales practices that may have affected complainants and even non-complainants; and
• an open letter setting out common sales failings to help firms identify bad practice
The FSA said the package will ensure customers are treated more fairly if they complain about PPI and better when buying the product.
Firms must implement the measures by 1 December 2010, with the time in between to prepare for implementation such as training staff to a higher level. The FSA will be monitoring firms closely to ensure firms operate to the new standards.
Dan Waters, the FSA’s director of conduct risk, said: “Today is the culmination of months of hard work and now, with these measures, we look forward to consumers being treated fairly whether they are buying or complaining about PPI.
“Since we took over the regulation of PPI we’ve carried out 24 investigations and three thematic reviews, issued warnings, halted the selling of single premium PPI with unsecured personal loans, visited over 200 firms, and handed out some very significant fines. Now, with this package of measures we’re confident we can mend a market that has been broken for too long.
“This remedy is fair to consumers and the industry alike. The onus is now on the industry to ensure it treats all customers fairly. We will be monitoring the implementation of our guidance closely to ensure real change is delivered.”
The policy statement follows consultation that saw significant levels of highly detailed feedback from PPI providers, sellers, trade groups and consumer bodies.
The measures follow up on the FSA’s commitment to reform the market and build on the agreement the FSA secured from the industry in 2009 to stop selling single premium PPI on unsecured loans.
The FSA has also taken action against 24 firms and individuals for PPI failings with fines totalling approximately £13 million.
Meanwhile, the Financial Services Consumer Panel has urged firms to start handling complaints fairly as soon as possible ahead of the FSA’s December 1 deadline.
Kay Blair, vice chairman of the Financial Services Consumer Panel said: “Consumers deserve to get an early Christmas present from firms and not have to wait until the new 1 December deadline. The financial services industry has been dragging its feet over resolving PPI mis-selling and letting down customers by not handling their complaints fairly.”
Industry and regulators must learn the lessons of this debacle with further industry action to treat customers fairly and provide simple straightforward products which consumers can compare easily, said Blair.
