Press Release

FULL HOUSE HEARS LATEST PPI DEVELOPMENTS

8 June 2007

Over ninety delegates attended a packed FLA conference on payment protection insurance on 30 May in London.

Peter Edmonds of the FSA gave an update on the ICOB review. The FSA’s intention was to adopt a principles-based approach which focused on outcomes for the consumer but offered flexibility on how they were achieved. A consultation would be issued later in June with view to a policy statement with final rules published by the end of 2007. Fiona King also from the FSA updated the conference on the latest developments of the third phase of the PPI thematic reviews.

Developments in the PPI market should be regarded as a business opportunity, according to consultant Mark Huggins. He set out ten top tips which included understanding the bigger picture, revisiting the marketing strategy from a consumer perspective and acting as an industry.

Peter Tutton from Citizens Advice urged industry to address the problems the bureaux encountered with PPI. Although he acknowledged significant progress had been made, he felt the time was right to consider what further steps were needed to improve the product and restore consumer confidence. 

According to Peter Hinchcliffe from the Financial Ombudsman Service (FOS), PPI was not the largest source of complaints but was a growing category. In particular the FOS was seeing more complaints around the sales process, which were more likely to find in favour of the consumer, than grievances around claims.

The afternoon began with three workshops: Richard Bostock of the FLA looked at information requirements, with a particular focus on oral disclosure; Consultant Rod Revell, considered closer cooperation with distribution chains; Mark Howard of Health & Protection Solutions led a discussion on how to innovate in the PPI market.

Peter Davis of the Competition Commission (CC) took delegates through the phases and processes of the CC’s investigation, sharing some of his experiences of other ongoing or completed cases.

The day ended with Brian Brown of Defaqto. He regarded PPI as “a seriously  ill” product heading for a slow death. However there was an opportunity to regain consumer confidence by embracing treating customers fairly properly, explaining PPI and how it worked and producing an annual report. He envisaged new products entering the market, for example standalone PPI and more short-term income protection.