Supplementary memorandum submitted by
I am writing following the FSA's oral evidence
session to the Treasury Select Committee, held on 24 October,
during which the issue of Payment Protection Insurance refunds
As you know, the ABI agreed with our members
earlier this year that all customers should receive appropriate
refunds whenever they cancel their PPI policy, whatever the reason.
We have recently double-checked with our member
companies and they all confirm that they support and will implement
this policy. Many have already done so.
This insurance is, in large part, distributed
by lenders, and premium is normally funded as part of the loan.
Some lenders need to undertake significant systems or procedural
changes to implement this change, for example to avoid penalty
charges or the loss of other benefits attached to the loan. Some
of these changes are required by the Consumer Credit Act. Product
literature and website information also has to be revised to ensure
clarity for customers.
I fully understand the Committee's concern about
this issue and can assure you that member companies are proceeding
as quickly as possible.