Single premium PPI 'must be withdrawn'

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Single premium Payment Protection Insurance PPI is the subject of a new campaign from the Financial Services Authority FSA.

The regulator has written to providers, telling them to withdraw the controversial loans insurance from sale by May 29th.

Consumer groups have previously criticised financial firms for mis-selling the cover - which is structured to make it difficult for customers to switch providers even if they are dissatisfied.

Earlier this year, a Competition Commission report banned single premium PPI from sale from October 2010 and introduced restrictions on other forms of PPI.

Commonly sold alongside personal loans, the insurance commonly works by helping customers with their repayments if they suffer a life event which causes them to take a drop in income.

In the letter, Jon Pain, the FSA's managing director of retail markets, wrote: "Our focus remains on how this product has been, and continues to be, sold and whether consumers have been treated fairly during the sales process.

"We therefore request that if your firm has not already done so, it stops selling single premium PPI with unsecured personal loans as soon as possible and in any event by May 29th."

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2009-02-25 12:04:41 © Moneyextra.com