Banks, building societies and other finance firms have agreed to change the way they sell payment protection insurance over the internet, following action by the industry regulator Financial Services Authority (FSA).
Firms were offering loans on their websites where insurance was automatically included, using techniques such as a 'pre-ticked' box. This sales technique could lead to customers purchasing insurance without making an active decision to do so.
Firms have now agreed to change this so that the customer must actively choose to buy it. This change means that it will be up to the customer to actively choose to buy insurance rather than it being sold automatically. Payment protection insurance is usually sold alongside another product.
This now gives consumers the opportunity to stop and think before buying what is often an expensive product from the lender, and consider cheaper independent alternatives.
Income protection: News update: July 2007