PPI still being mis-sold to millions
June 10, 2008
Over the past couple of years there has been a major crackdown on the sale of Payment Protection Insurance to consumers that were not suited to the plans. However, according to consumer campaign officials and watchdogs, there is still evidence of large scale mis-selling of this type of cover to millions of people that can never actually claim on the insurance, and are therefore wasting their time.
Campaigners and consumers groups have estimated that around two million consumers may be paying for payment protection insurance cover on which they can never make a claim because the cover is not suitable for them. This even includes pensions that have no income to protect and therefore cannot claim on the cover. It is thought that around six million consumers have taken out such cover over the past five years, and that this means that a third have cover that they cannot claim on.
It is also thought that banks are making around £1.5 billion a year from this type of cover. Whilst there has been a major crackdown on the mis-selling of this type of cover the Office of Fair Trading, the Competition Commission, and the consumer campaign group Which? claim that the scale of the problem is still huge.
One official from Which? recently stated: ‘We’ve always known that people were being mis-sold payment protection, but we were still amazed to discover the scale of it. It appears that salespeople are chasing their commissions, their bosses are chasing profits - where’s the sense of responsibility to the customer?’
However, the British Banker’s Association insists that this cover is invaluable to many, stating: ‘PPI provides borrowers with a plan B if their circumstances change. If they lose their jobs or become ill, their commitments can still be met, so it’s important that people are not discouraged from taking it out.’
Recent additions:
- Cheap fixed rate homeowners see light at end of tunnel
- Mortgage brokers given warning by regulator
- 2008 to be a tough year for mortgage lenders
- Mortgage lending still on the decrease
- Consumers could be hit by rising mortgage rates from lenders
- High Court rules against the banking industry For a number of years the topic of Payment Protection Insurance, or PPI, has been a hugely controversial one, following claims that millions of people had been mis-sold the cover over the years. Consumer groups
- DWP loses sensitive information There has recently been another blunder, with yet another government agency losing sensitive data about consumers. The Department for Work and Pensions has admitted that it has lost hundreds of budgeting loan application forms, each
- Rise in loan costs due to PPI crackdown According to a recent report the ongoing crackdown in relation to Payment Protection Insurance, or PPI, on loans has resulted in an increase in costs and interest rates for those taking out personal loans. Officials
- Lenders told to stop selling single premium PPI right away It was recently reported that regulators had brought in a ban on the sale of single premium Payment Protection Insurance from lenders, with the ban officially coming into force in October of next year. However,
- Loan protection is still necessary Over recent years there has been a lot of new coverage about the mis-selling of payment protection insurance, or PPI, on loans, credit cards, and other forms of finance. This has been in the headlines
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[...] although the ban is not set to start officially until October 2010 lenders are being told to stop selling this controversial form of protective cover right away, with authorities citing ongoing concerns over this type of insurance cover as the reason for [...]