The OFT recently published its interim report into PPI, following a "super-complaint" last year from the Citizens Advice Bureau, pointing out a number of flaws. These include accusations of lack of competition in the market, excessive commission payments and a poor record of paying out on claims.

Following on from this, the OFT invited the biggest players in the market, mainly high street lenders, to meet to discuss the report's findings.

But independent insurance broker, Britishinsurance.com is accusing the PPI providers of burying their heads in the sand by continuing with poor sales practice..

Simon Burgess, managing director of Britishinsurance.com, attended the meeting. He said: "It seems many of the players in this market realise their stance is indefensible and are waiting until they are forced to make changes rather than act voluntarily.

"I think they realise an overhaul of the market is just around the corner, but are quite happy to continue making as much profit as they can until this happens.

"The OFT has limited powers but if it makes a referral to the Competition Commission at the end of the year the market will have to change."

Providers, which include HBOS and Sainsbury's Bank, say they are co-operating fully with the OFT inquiry and will "continue to take an active role in this process and assist with its ongoing inquiries".

The Post Office entered the market earlier this year with Lifestyle Protection, covering life, accident, sickness and unemployment.

It has responded to the OFT's report by calling for an open market option for PPI. This would encourage other providers to take voluntary action and be open and honest with customers, at the point of sale, that they don't have to buy PPI tied to their product and that they could find it cheaper by shopping around.

It believes an open approach will allow customers to understand better the range of protection options available, helping them make a more considered and informed buying decision.

Despite the criticism being levelled at PPI, consumers should still be aware that it has a role to play and not leave themselves open to falling into financial dire straits if their circumstances change.