‘Expensive’ PPI sales lambasted
Overpriced and unnecessary payment protection insurance (PPI) is a burden many consumers unfairly have to shoulder and underhand ways of selling it – such as with personal loans
need to be reined in.-more->
This was the conclusion of the Income Protection Taskforce (IPT), which also called on the regulator to limit the profits that institutions make by selling PPI. Whereas people can fairly compare car insurance, for example, a similar comparison in the PPI field is next to impossible.
The recommendation to limit profits on PPI was part of a White Paper produced by the IPT to encourage the take-up of Income Protection insurance – generally regarded as a better product than PPI – and to prevent PPI being mis-sold to people who do not need it in the way that they need life insurance cover, for example.
There are approximately 20-25 million PPI policies held in the UK, many of them sold with mortgages and personal loans. But sceptics claim that the cover is too expensive, difficult to make a claim on and sold to the wrong customers on many occasions, unlike products such as building and content insurance.
The IPT said in its report: “It is hardly surprising that one of the UK’s top mortgage experts suggested that the banks will continue to make hay whilst the sun shines, so huge are the profits.”