Over the course of the past few months, you may have regularly read news pieces on the proposed changes to Payment Protection Insurance (PPI) following a report from the Competition Commission (CC) and investigation by the Office of Fair Trading (OFT) and Financial Services Authority (FSA), due to the high number of complaints which have been received by the organisations from consumers with regard to the mis selling of these products.

PPI is often sold by banks, building societies and other lending institutions alongside a new personal loan application, at the same time as the loan and is intended to protect the monthly repayments in the event of the borrower suffering accident, sickness or unemployment.

The CC has proposed that there should be a waiting period of 14 days between the loan application and sale of the PPI policy and that single premium PPI should be banned.

In line with theses recommendations, five high street banks have now said that they are to stop selling PPI on a single premium basis in connection with unsecured loans to customers, from, the end of this month. As from February, these lenders will only be able to recommend regular premium PPI products alongside their personal loan products.

The FSA has congratulated the banks in question on the move, saying that it is a big step in the right direction towards improving the sale of PPI policies and that other loan providers should now take note and make similar changes to their product range and sales processes.

Jon Pain of the FSA said “We are pleased these firms have stopped selling single premium policies and would expect other firms to notice these developments and review their own positions.

A PPI product can be helpful for customers wanting protection on a specific credit agreement, as long as the policy is sold appropriately. Consumers can visit our website, moneymadeclear, to get information on their protection choices and use our tables to compare PPI policies.”