New rules will not 'reduce the number of suitable sales of PPI'

15 November 2010 at 19:07

New rules will not 'reduce the number of suitable sales of PPI'Compliance with new Financial Services Authority (FSA) rules will not lead to a reduction in the number of legitimate sales of payment protection insurance (PPI), it has been claimed.

The FSA has announced new PPI rules that are likely to see banks pay out millions in compensation to customers who have been mis-sold PPI packages.

They will also govern how firms deal with future customer complaints over PPI.

This has led to the British Bankers' Association's requesting a judicial review into the new regulations as a way to prevent the rules being applied retrospectively and so avoiding compensation payouts.

However, Martin Bamford, an independent financial advisor and the Surrey region chairman for the Institute of Financial Planning, said the measures would prevent PPI packages being sold to customers who do not need them.

"The new regulations are likely to reduce the volume of sales. I do not believe that they will reduce the number of suitable sales of PPI," he said.

"Instead, they will protect consumers from the worst of the sales tactics often deployed by the banks and other organisations to sell PPI in a pressured environment."

In the last five years there have been more than a million complaints made to firms about PPI, says the FSA.

Posted by James HarrisonADNFCR-3006-ID-800236675-ADNFCR



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