You are here: Home - Uncategorized -

Payment protection insurance comes under scrutiny

0
Written by:
02/05/2007

Consumers are at risk of being “tricked” into buying payment protection insurance (PPI) they may not need when they take out a loan, according to consumer organisation ‘Which?’

PPI is intended to help people repay their loans if they become ill or lose their jobs, but many in the financial services industry say that it is expensive and liable to be mis-sold.

The Competition Commission is undertaking a survey of PPI – which is worth £5bn a year – to ensure that it is sold appropriately after a referral from the Office of Fair Trading (OFT).

The OFT has identified a number of failings in the way the product is sold, particularly the fact that many lenders price PPI into the cost of a loan without saying that customers could shop around for better cover.

However, even this is problematic, as PPI is a complex product and straightforward comparisons are sometimes difficult to make.

It was also implied by many salespeople that taking out the PPI would help people in their application for credit.

PPI is not always a suitable product for everyone but we are paid good commission for selling it,” said a tele-salesperson for a major High Street lender.

“The most effective way is to make out that it is part of the loan and people will then take it without question. It’s probably an area that needs looking at by official bodies.”

 

Related Posts

Tagged:

Tag Box

Debt

Pension

Spending

Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

The essential Your Money guide to the April 2018 tax changes

As we head into the 2018/19 tax year, a number of key changes take place to existing policies while some new i...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

YourMoney.com Awards 2018

Now in their 21st year, our awards recognise the companies offering the best products and services to consumers

Money Tips of the Week

Read previous post:
Home Information Packs take yet another pasting

The Government’s ‘initiative’ on Home Information Packs (HIPs) has taken another battering, this time from a House of Lords Committee, which has...

Close