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Wednesday 1st October 2008
The Financial Services Authority (FSA) is to crack down on the Payment Protection Insurance (PPI), new comments from the regulator suggest.
According to the body, it will be "escalating" its interventions in the sector - which has been dogged by claims that the cover is mis-sold and does not offer good value for money.
PPI works by helping to cover loan repayments of policyholders who suffer sudden job loss and other major life events.
However, some consumer groups have complained that it is often sold bundled-in with loans - rather than as a separate, and potentially costly, service.
Indeed, last week a case of a couple paying £23,000 in PPI for a £56,000 loan was reported on by Which?
Jon Pain, managing director of the FSA's Retail Markets, said: "Tackling poor PPI sales practices remains a high priority for the FSA.
"We will intervene to ensure consumers are protected and are considering what regulatory powers are the most appropriate to deliver fair outcomes."
He added: "Firms may wish to consider stopping selling single premium PPI sold alongside unsecured personal loans, given the continuing problems in the sales of this product."
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