Payment Protection Insurance or PPI is now available for almost every item, regardless of the fact that the item is an expensive one or is just an ordinary electronic device.
The implementation of PPI and its applications on these items has created many problems. Although it was designed to help the customers in avoiding a financial disaster in case of an emergency, many find it overbearing and counterproductive in some cases. When such a situation arises, Financial Services Authority (FSA) comes into play.
FSA is the regulator of all financial institutions in the United Kingdom. Given this supervisory role, FSA has to deal with a number of cases where people lodge complaints about PPI. The usual complaint would be related to a non-payment of PPI dues or the failure of PPI to help a customer in avoiding bankruptcy, among other things.
The malpractices in the PPI sector are in the notice of FSA and it has issued many directives to tackle the issue. As mentioned earlier, retailers lure customers into PPI and they agree on getting a PPI to ease out their payment plans.
When they try to repay their dues as per the payment plan and want to use PPI, they find it to be either non-functional or with some serious technical or legal procedures. Simply put, they are unable to use the PPI and have to arrange the payment by themselves. Additionally, in case of any emergency, the PPI proves to be a disaster instead of helping these poor customers.
FSA has taken measures that limit the sales of PPI to unsuspecting customers. It had become a common practice that most durable consumer goods were available with a PPI. When a customer used to buy a product, he used to have no idea about the ramifications of a PPI. When these customers found out about this scam, they had no other choice, but to contact FSA about these malpractices.
FSA has also regularised the clauses included in the PPI plans. Before these new rules were implemented, companies were reluctant to refund the money and many even refused to help the ailing customers. Now they are bound under law to repay every single penny of the affected customers.
The apex regulator has also launched many campaigns aimed at educating customers about the pros and cons of PPI agreements. Additionally, the regulator has started crackdowns on companies that have shady PPI practices. Many companies have already been closed while others have rectified their PPI payments and procedures.
There are also some reports that FSA is planning to impose a ban on PPI but no decision has yet been reached on this issue. Some banks in the UK, on the other hand have applied brakes on their PPI programs and a momentum is building up to ban the system of PPI ultimately. FSA can decide in favour of this increasing demand, as PPI has failed to act as an effective tool for customers.
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