Post Office wants end to aggressive PPI tactics

The Post Office is calling for aggressive payment protection insurance (PPI) sales tactics to be stamped out.

It follows the news that credit card company Capital One has agreed to pay a fine of £175,000 following an investigation by the Financial Services Authority (FSA).

The firm was lambasted for its poor sales and administration in regards to PPI and the Post Office has welcomed the FSA’s decision to issue a fine.

However, it also calls upon the industry as a whole to improve its standards or risk losing the trust of customers.

“If we want customers to trust our industry, these aggressive sales tactics must cease to allow for a more transparent and fairer marketplace,” said Claire Oldstein, head of communications at the Post Office.

“The Post Office has long been calling for an open market for PPI sales, where providers are honest with customers that other, cheaper standalone products are available.”

Ms Oldstein also pointed out that few customers know a great deal about PPI, with many unaware that they even have it.

In addition, aggressive sales tactics are leading to many people feeling as though they have no choice but to take out a PPI policy when they get a loan or credit card, even though this is most certainly not the case.

PPI is a voluntary insurance which is designed to protect borrowers should they be unable to work and cannot afford the repayments on their loan.

Many borrowers find that it gives them peace of mind, but it is recommended that you shop around for the best deal and do not feel as though you must take the policy offered by your lender.

Tags: authority, capital one, administration, mortgage, credit, PPI policy, post office, fsa

FSA makes MEAF statement

The Financial Services Authority (FSA) has released a statement on mortgage exit administration fees (MEAF).

The organisation was responding to recent concerns which have been raised about MEAFs which have been unfairly increased.

It means that some consumers have been charged higher exit fees than was originally agreed and has made switching mortgage lender and paying a mortgage off early more difficult.

FSA officials have now said that lenders have four options, one of which they must settle on by February 28th.

Lenders can either charge no MEAF whatsoever, charge the original MEAF, a revised MEAF or the current increased MEAF.

“We expect that these measures, agreed with the Council of Mortgage Lenders, will stop borrowers from being surprised by unexpected increases in these fees,” said Clive Briault, managing director of retail markets at FSA.

“People will now know when they sign up for a mortgage what fee they will pay on exit, or should be given a clear idea of how the fee might be increased fairly.”

FSA is also calling for previous customers to be given the same treatment as new customers, meaning if a customer has paid a higher MEAF than current borrowers, he or she should be refunded.

Tags: administration, customer, mortgage lenders, idea, meaf, Financial Services Authority, council of mortgage lenders, clear idea