Firms agree to change the way they sell PPI over the internet
Major finance firms have agreed to change the way they sell payment protection insurance (PPI) over the internet, following action by the Financial Services Authority (FSA).
Firms were offering loans on their websites where PPI was automatically included, using techniques such as a 'pre-ticked' box. This sales technique could lead to customers purchasing PPI without making an active decision to do so.
Firms have now agreed to change this so that the customer must actively choose to buy it.
Vernon Everitt, FSA Director Retail Themes, said:
"We have made PPI a top priority and are pleased that firms have agreed to change the way they sell PPI over the internet. Naturally, many customers are focussed on getting the loan itself, but it is just as important that they also think about whether or not they want to protect their loan repayments by taking out PPI cover.
"This change means that it will be up to the customer to actively choose to buy PPI rather than it being sold automatically."
The FSA is due to report on its latest investigations into PPI sales standards in September 2007.
This is the latest in a series of initiatives by the FSA to improve sales standards in the PPI market. In March, the FSA secured an <http://www.fsa.gov.uk/pages/Library/Communication/PR/2007/043.shtml> agreement with a number of trade associations on greater fairness and transparency with regard to refunds of single premium PPI policies. And last month the FSA proposed changes to its <http://www.fsa.gov.uk/pages/Library/Communication/PR/2007/077.shtml> Insurance Conduct of Business rules designed to improve selling practices on PPI and other protection products. Subject to consultation, these are due to come into effect in January 2008.
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