Dan Boyle (Cork South Central, Green Party)
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Question 72: To ask the Minister for Finance if his Department's attention has been drawn to the mis-selling of and excessive commission on payment protection products; the measure he intends to take in order to protect consumers, particularly those on low incomes, from mis-selling of and excessive commissions on payment protection products; and if he will make a statement on the matter. [7930/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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As Minister for Finance, I am responsible for the legal framework governing financial regulation. In the context of this legislative framework, the Financial Regulator, which was set up in May 2003, has responsibility for consumer protection issues.

I am aware that the Financial Regulator has expressed its concerns about payment protection insurance, PPI. The consumer director in the Financial Regulator highlighted her concerns in relation to this financial product in the Financial Regulator's annual report in July 2005. These concerns include how payment protection insurance is sold, how the costs are disclosed to customers and how premiums are handled in the event of early repayment of a loan.

The Financial Regulator has been actively pursuing this matter and, as result, a number of actions are being taken. First, through the new consumer protection code which the Financial Regulator proposes to introduce from July of this year, a suitability test will be applied to this product. In other words, it cannot be sold to the customer unless it is suitable to that customer. Also, when taking out a loan, the loan repayments will be quoted separately to that of PPI, so that the customer will see the true cost of the product.

Second, the Financial Regulator is also currently consulting on introducing new requirements in relation to the disclosure of commission payments. Third, the Financial Regulator has produced consumer information materials on payment protection insurance, alerting consumers to the various issues they should consider in relation to this product. The fact sheet published earlier this month emphasises: that PPI is not compulsory; the high cost of cover; the very specific nature of the cover provided; and the need to ensure that the cover is in fact required.

Anyone who is concerned that they were mis-sold payment protection insurance can complain to the financial institution concerned or, if the complaint is not resolved, to the Financial Services Ombudsman.

I am satisfied that the active interest which the Financial Regulator is taking, together with the measures outlined above, will ensure that there is a high level of consumer protection and information available in the area of payment protection insurance.