Payment Protection Insurance - 25/6/07

The FSA (Financial Services Authority) has issued guidelines today inviting the finance industry to comment on their initiative to set out proposals for developing new comparative tables for payment protection insurance (PPI) and unsecured personal loans. The FSA explain the proposed scope of these tables and have invited comments back by Monday 23rd July.

The PPI tables are intended for all consumers thinking about taking out a mortgage, unsecured personal loan or credit card PPI policy. The FSA also intend to publish a table of unsecured personal loans without PPI, so that consumers are not limited to seeing loans that are packaged up with protection.

This means that they can compare the cost of a loan combined with an unpackaged PPI product.

The following are covered in the PPI table:

• single and regular premium policies (including single premium policies for
sub-prime mortgages);
• products from standalone providers; and
• unsecured personal loan products from lenders where the PPI is linked
to the loan (the table will feature information on the PPI element of
such products).

The FSA propose to cover the following in the loan table:

• unsecured personal loans where the PPI is linked to the loan; and
• standalone unsecured personal loans.

They will not publish tables for secured loans or secured loan PPI as they already have a mortgage comparative table, but this only deals with mainstream mortgage products, and sub-prime products are not featured.

The FSA want to consult and try to implement the comparative tables in the UK by March 2008.