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FSA calls for end of single premium PPI

FSA calls for end of single premium PPI

Category: Loans

Updated: 27/06/2017
First Published: 24/02/2009

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Companies that are still selling single premium payment protection insurance (PPI) alongside unsecured loans have been urged to stop doing so.

The Financial Services Authority (FSA) has written to firms making the request, following the Competition Commission's (CC) decision to ban the product from October of next year.

PPI is often offered to protect against the possibility that consumers become unable to repay unsecured loans, but the CC found that single premium policies - which add the cost on to the loan itself - are unfair.

And managing director of retail markets at the FSA Jon Pain urged providers not to wait until the ban comes into effect, but rather cease selling by the end of May at the latest.

"We believe that PPI can play an important and legitimate role to cover repayments on specific credit agreements for consumers facing job loss, or other issues at this difficult time," he wrote, although he added that there is concern over how products are sold.

The CC announced the ban last month, noting that consumers are often unaware that they can carry out comparisons to find the best PPI deal.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.