The FSA And Payment Protection: Ensuring Integrity In The Industry
A recent investigation by the Financial Services Authority (FSA) into the possible mis-selling of payment protection insurance (PPI) has revealed a breach within the UK financial services industry with regard to this unethical business practice. The FSA payment protection investigation has paved the way for many PPI customers to feel more confident in their purchase of this most-valuable form of income and payment protection. Because after all, in an economic climate such as the one the UK--and the world-- is currently experiencing, having a solid contingency plan in place is not short on wisdom. The FSA payment protection probe has simply allowed this wisdom to be purchased with more certainty.
The FSA was instituted as a result of the Financial Services and Markets Act of 2000. It is a statutory entity that exists to ensure proper, and ethical behaviour within the UK financial-services industry. The FSA is non-governmental; completely independent; and entrusted with particular statutory powers aimed at regulating improper financial-service-provider actions. A designated company entirely financed by the financial-services industry itself, the FSA consists of a Treasury-appointed board which dictates and directs overall policy; although the final decisions are mandated by the chief executive. The FSA was not created to be a spear-throwing head-hunter; but rather an organization aiming to promote efficient and orderly financial-services actions. It is the primary goal of the FSA to help retail financial-service customers achieve the fair deal they deserve.
The results of the FSA payment protection investigation were far-reaching and startlingly transparent. Through a series of supervisory visits and unsolicited mystery shopping, it was determined that a number of UK financial-services companies were indeed engaged in less-than-integral selling practices; of which included: Firms selling PPI policies whereby customers were provided with little to no payment protection coverage; instances where ill-advised and misleading advice was offered; and cases where adequate systems were not in place to properly match a PPI policy with the paying customer. Results such as these prove the efficacy of the FSA payment protection survey and subsequent recommendations; which include: Putting the financial-service industry on high-notice to address the aforementioned violations; as well as putting plans in the works for future, follow-up investigations.
According to Clive Briault, FSA Managing Director for Retail Markets, "When properly structured, explained, and sold, payment protection insurance can provide worthwhile cover for consumers against unexpected changes in their personal circumstances."
The FSA should be applauded for their efforts.
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