There is something pernicious about the companies that often sell payment protection insurance. This is the cover that theoretically pays the interest when borrowers lose their jobs or are hospitalised. One lot of vulnerable people (low-paid shop workers) are encouraged by the dangling of bonuses to push PPI to another lot of vulnerable people (financially naive borrowers). The persuasion is done with varying degrees of honesty and openness.

Too often, those targeted for PPI don't even know they have bought it, or are wrongly told it is compulsory, or have no chance of ever claiming on it because they are too old or self-employed or are caught out by some other exclusion in the fine print. PPI buyers could nine times out of ten get much better terms by shopping around.

The Financial Services Authority has rightly been cracking down on mis-selling and related failings for months. HSBC, GE Capital and Capital One are among the big names to have been fined. But the fines have been modest compared with the size of this industry. Banks and retailers make £5.5 billion in premium income a year from PPI and the margins are eye-popping. Storecard PPI pays out just 12p in claims for every £1 of premiums.

The FSA has now gone a big step further with its action against Land of Leather, fining not only the company but also its chief executive at the time, Paul Briant.

To hit directors in the pocket may be the best way of curbing the worst PPI abuses. It is the incentive structures set up for junior staff by senior management and the lack of training and oversight that are responsible for most of the problems. The £14,000 fine is hardly huge compared to Mr Briant's £526,000 salary last year. But it may be telling that he was relieved of his post shortly before yesterday's announcement.

The Competition Commission is soon to report on PPI and may impose remedies to make the market work more fairly. It is unlikely, however, that anything it comes up with will be half as potent as publicly censuring and fining senior executives.

Either way, the fat years for PPI originators and sellers are probably fading. The lashings of cheap credit beside which PPI was offered are being withdrawn. And the basic underpinnning that made PPI so profitable - strong job security and low unemployment, leading to few claims - may soon start to crumble as the downturn bites.

david.wighton@thetimes.co.uk

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