The Financial Services Authority (FSA) and the Office of Fair Trading (OFT) have joined forces to help prevent the problems associated with payment protection insurance (PPI) recurring in a new generation of products. The FSA and the OFT are consulting on proposed guidance to firms in relation to payment protection products - which can fall within either regulator's remit. This is a key time as the market shifts away from PPI and firms begin to develop new products or product features - such as short-term income protection, or debt freeze or debt waiver as elements of a credit agreement or mortgage.

The two organisations will continue to monitor developments in the market, and will take appropriate action under their respective powers where firms' products or practices risk causing detriment to consumers.

Payment protection products within the FSA's jurisdiction
The FSA's guidance stresses that firms should ensure that product features reflect the needs of the consumers they are targeting. There are four key areas of concern that providers should think about carefully:

• firms not properly identifying the target market for the protection product
• the protection not reflecting the needs of the intended consumers
• the benefit of a successful claim not matching the needs of the claimant, and
• product features or pricing structures creating barriers to comparing products, exiting a policy or switching cover.

Margaret Cole, FSA managing director, said:....Read more here--> FSA and OFT publish draft guidance on payment protection products - The Office of Fair Trading