Is this the end of payment protection insurance?
The FSA has today made a historic move by suggesting that UK banks and financial companies withdraw payment protection insurance for loans and credit cards. This brings to an end a very volatile period in the financial sector in which a number of its mis-selling scandals, involving payment protection insurance, were investigated and the original complaints on the whole were upheld.
There is an agreement already in place to bring to an end the sale of payment protection insurance by October next year although the FSA has now asked the U.K.'s financial community to withdraw the product by no later than 29 May. While they have no legal right to physically stop the sale of payment protection insurance by the end of May they seem very likely to get their way.
Payment protection insurance has been one of the many thorns in the side of the FSA as it has created substantial income streams for financial groups around the UK while offering very little in return to UK consumers. It was found that in many situations those who acquired payment protection insurance would not be able to claim and were effectively no better off with the insurance.
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