Press Release

PAYMENT PROTECTION INSURANCE EXPLAINED

24 October 2007

Consumers will find payment protection insurance (PPI) much easier to understand following the publication of “A consumer guide to payment protection insurance” issued by the Finance and Leasing Association (FLA) and the Association of British Insurers (ABI).

This guide will be made widely available to consumers before they take out a credit agreement. It tells them what PPI is, what it does, and what to look out for when taking out a PPI policy.

FLA Director General, Stephen Sklaroff, said:

“As the FSA has recognised, PPI provides valuable peace of mind to customers when taking out credit agreements. But it needs to be explained well. This new guide tells consumers in plain English what they need to know. We hope that after reading this guide, well-informed consumers will be able to ask the right questions and get the insurance policy that suits them.”

Nick Starling, the ABI’s Director of General Insurance and Health, said:

“This consumer guide is the latest in a series of initiatives by the financial services industry. This new, more detailed guide perfectly complements the shorter guide the ABI, FLA and other trade associations published in the summer. Insurers are committed to making sure that customers understand what PPI does and doesn’t do. We hope these guides give customers what they need to make an informed decision about PPI.”

The full guide can be found at: http://www.fla.org.uk/fla/consumerfinance/Guide_to_Payment_Protection_Insurance.riv