The head of the Finance & Leasing Association (FLA) has
called for “more standardisation of information” when customers
take out payment protection insurance (PPI) with finance agreements
– but has argued that PPI still has an important role to play for
consumers, despite recent controversy.
Stephen Sklaroff, director-general of the FLA, made the remarks
in response to an interim report, recently published by the
Competition Commission, as part of its probe into the selling of
PPI in the UK.
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The interim report found that there is “little or no
competition” among companies when PPI is sold, as it tends to be
bundled along with a credit arrangement.
As a consequence, consumers are overcharged for PPI to the tune
of £1.4bn per year, the Competition Commission reported.
“Many consumers are unaware that they can buy PPI from other
providers and rarely shop around to compare prices and policies,”
the Commission said, making it hard for competing PPI providers to
reach these customers, and meaning that distributors are able to
charge higher prices for the cover.
Sklaroff said: “The FLA looks forward to working with the
Commission to implement a package of measures which will enhance
the industry’s service to its customers. We have suggested to the
Commission that this should concentrate on further improving the
way PPI is sold to customers, while enhancing the competitiveness
of the market.
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By GlobalData“For example, more standardisation of the information provided
to customers would be helpful. But it would not be sensible,
particularly in current credit market conditions, to prevent
customers from buying PPI when taking out a loan, or prohibit
customers from protecting themselves via a single premium.”
Motor Finance Issue: 45 – July 08
by Jo Tacon ,
Published for the web: July 25 08 9:50
Last Updated: July 25 08 9:51
